The regulatory framework for social housing in England from April 2010

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The regulatory framework for social housing in England from April ...

The regulatory framework

for social housing in

England from April 2010


March 2010


The regulatory framework for social housing in

England from April 2010

Contents

Foreword 3

Decision statement 5

Summary of key terms 8

1 The TSA’s approach to regulation from April 2010 9

2 Standards for registered providers 20

Tenant involvement and empowerment standard 20

Home standard 23

Tenancy standard 25

Neighbourhood and community standard 29

Value for money standard 31

Governance and financial viability standard 32

3 Supporting improvement and monitoring performance against the

standards

Promoting sector-led improvement and good practice 36

The TSA’s general approach to assessing compliance 37

Assessing compliance with the Decent Homes Standard 39

Guidance on annual reports to tenants 40

The TSA’s risk-based approach 41

Requirements for smaller providers 44

36

The regulatory framework for social housing in England from April 2010 1


4 Inspection 46

How we shall commission housing inspections from the Audit Commission 46

Review of the inspection approach and the Audit Commission's KLoE 47

ALMO inspections for 2010-11 48

5 Complaints received by the TSA about providers 50

6 Intervention and enforcement 53

Our new graduated range of powers 53

Factors that may lead to the use of our powers 57

Checks and balances on the use of our powers 58

7 Registration and deregistration 61

The eligibility criteria and conditions for new entrants 61

The registration criteria and registration process 64

Deregistration criteria 65

The register 66

Fees 66

Accreditation of managers 67

8 TSA Directions under the 2008 Act: accounts and disposal proceeds

fund

68

The annexes to this document are available in our publication The Regulatory Framework for Social

Housing in England from April 2010 – Annexes to the TSA's Regulatory Framework Document.

2


Foreword

We are the regulator for social housing in England.

Our new powers come into effect for all social

housing providers from 1 April 2010. From that

date, for the first time, every social housing tenant

in England will benefit from a common set of

standards that will apply to all providers whether

they are a local authority, a housing association, or

other form of provider.

We have shaped a regulatory framework in

collaboration with tenants, local authorities, housing

associations and our many other partners. The

framework establishes a set of standards to help

improve the services provided for some eight

million people who live in social rented and shared

ownership homes in England.

Our standards and approach to regulation are

fundamental to us in:

• ensuring a fair deal for tenants – who cannot

in most cases simply vote with their feet and

move to another provider if services are poor

• protecting taxpayers and other funders

of social housing – by continuing our work

on sector governance and financial viability to

safeguard and maximise the value from public

investment and promote private investment in

new and existing homes

• being a modern and effective regulator – a

consumer-focused regulator that is efficient,

accountable, proportionate and transparent in its

approach

We have made it clear that our regulation can

best support lasting service delivery improvement

if both providers and tenants have a sense of

ownership in the regulatory framework. We have

based our framework on creating a new expectation

that providers will involve their tenants and hold

themselves open to scrutiny by them. We set out

how we expect, at the local level, providers to

develop their service offer in response to local

priorities and to work with other partners in their

neighbourhood to improve the quality of life for all

residents.

Hand in hand with these new expectations we

are also taking this opportunity to free providers

to innovate in the best interests of their tenants

through a significant reduction in red tape. For

housing associations, we will withdraw 54 Circulars

previously issued by the Housing Corporation that

set out guidance on many issues – guidance that

too many providers previously read as the regulatory

rulebook. From 1 April 2010, when councils owning

social homes will be subject to regulation by us, we

will regulate in a way that supports the principles

of the local performance framework. With greater

freedom for providers comes greater responsibility

to deliver a better deal for their tenants and be

held accountable for achieving this by their own

governing bodies and their tenants. Only when this

fails to deliver a fair deal for tenants will we, as the

regulator, step in.

The regulatory framework for social housing in England from April 2010 3


The feedback we received to our six draft standards

that we proposed in November 2009 has been

supportive. We have listened to detailed feedback

on a number of standards and considered the

different views that have been expressed by a range

of respondents. We have had to balance these

conflicting views in coming to final decisions on

the standards and in doing so we have made some

adjustments.

We know that where performance is poor or

involvement is weak, this can have a significant

negative effect on tenants’ lives. Where this is the

case, we will expect speedy self-improvement and,

where this is insufficient, we have a new graduated

range of enforcement powers to ensure that

tenants get a fair deal.

The six standards describe the outcomes we want

to see achieved and some specific expectations

we expect all providers to comply with. Our final

decision on the requirements, and language, in

relation to local standards, which we now refer to as

‘local offers’, reflects feedback we received about

how providers and their tenants might innovate in

practice. We have consciously given providers and

their tenants the freedom to define what ‘local’

means to them. However, we have responded to

feedback and set out more clearly the areas we

expect providers to tailor their service offer and

how we require providers to set out clearly to their

tenants how they will meet all of the TSA standards,

whether they are locally tailored or not. Most

importantly, we expect providers to involve their

tenants in the design of their services and to deliver

on their promises.

Peter Marsh

Chief Executive

4


Decision statement

This section sets out key information about the

decisions we have taken, what effects we think

these decisions could have and who we have

involved in reaching these decisions.

The decisions outlined in this document will be

formally made only once the statutory instrument

putting in place the relevant powers has been made

and the Government has made the Direction that

it intends to give us in relation to local authority

landlords. In light of the fact that these standards

will take effect from 1 April 2010, we wish to

publish the form of the decisions before they are

formally made. The decisions are therefore subject

to the completion of the Parliamentary process and

the Secretary of State formally making the Direction

relating to local authorities that the Government has

published.

Contact us

The main decisions of the TSA

recorded in this document

Under the Housing and Regeneration Act 2008, the

TSA has decided to:

• set standards for social housing providers in

England and describes how it will go about

regulating against these standards

• establish guidance for how it will use its

powers

• establish criteria for providers seeking to

register and deregister

• issue certain Directions in relation to the

accounts of registered providers and the

Disposal Proceeds Fund

A separate decision document published alongside

this document establishes the TSA’s general

consent for the disposal of social housing dwellings,

The TSA’s Consent to Disposals (March 2010).

If you have any queries about this document, please

contact:

Customer Service Team

Tenant Services Authority

1 Piccadilly Gardens

Manchester M1 1RG

Telephone: 0845 230 7000

Email: enquiries@tsa.gsx.gov.uk

What it means for you

This document sets out the policies that will

comprise the new regulatory framework from 1

April 2010.

Although continuing our important focus on

governance and financial viability of housing

associations, it introduces new standards that

providers will be required to meet in relation to

several aspects of service delivery and tenant

involvement. It also introduces a new graduated

suite of intervention and enforcement powers.

The regulatory framework for social housing in England from April 2010 5


Significantly, Parliament has decided that councils

owning social rented homes should be on the TSA’s

register and hence subject to the same regulation

as all other social landlords (except for some

adjustments to reflect their unique democratic and

financial structures). The register is also open to

a wider range of providers than before, including

providers trading for profit or where social housing

is not the main purpose of their business.

Context for this decision

document

The Housing and Regeneration Act 2008 followed

the 2007 Cave Review of social housing. The Cave

Review made a clear case for reform, to introduce

greater protection, choice and involvement for

tenants of social housing in England. This document

sets out the policies that implement the 2008 Act.

The Government has issued two documents that

are relevant to the decisions contained within this

decision document. The first contained its Directions

to us on three particular standards (Directions to the

TSA, November 2009, CLG). These relate to rents,

quality of accommodation and tenant involvement.

Our standards must comply with these Directions.

The second contained the Government’s statement

of policy intent in terms of our powers in relation to

local authorities (The Housing and Regeneration

Act [Registration of Local Authorities] Order 2009

Consultation, November 2009, CLG). Parliamentary

process to approve this order 1 began in January

2010. We will put an update on our website when

the approval is formally confirmed.

Our consultation process

The decisions in this document and the general

consent have been developed following three

stages of consultation. These were supplemented

with many bilateral meetings and specific

stakeholder events. To support our engagement,

we established a sounding board of stakeholders

and three advisory panels representing providers,

tenants and advisors. Membership of these panels

was set out in previous consultation documents.

The first stage of engagement was our National

Conversation, from January to May 2009. Aimed at

understanding the views and priorities of tenants

across the country, it included national and local

events and detailed research and surveys. This was

arguably the largest ever discussion with tenants in

England, introducing ‘local conversations’ to support

innovative ways for tenants to get together and

contribute their views on our proposals. As a result,

we received 27,000 responses to our questionnaire.

We published the main conclusions from the

National Conversation in June 2009.

This informed a second stage, with the publication

of a discussion document in June 2009. This

described ideas and some proposals for the new

1

Laid as Housing and Regeneration Act 2008 (Registration of Local Authorities) Order 2010.

6


egulatory framework. We received 325 written

responses to this document and 399 responses

from local conversations. A summary of responses

to this document was published in October 2009.

All non-confidential responses are available from

our website.

The final stage was the publication in November

2009 of our statutory consultation document.

This set out our formal proposals on the new

framework. It was supported by the publication

of two supplementary consultation documents

on our use of powers and consents for disposals.

We received 491 written responses to these

consultation documents. A summary of responses

is published alongside this document in The

Regulatory Framework for Social Housing in

England from April 2010: Analysis of Respondents’

Views, March 2010. The responses on consents are

summarised within its separate decision document.

Non-confidential responses are available from our

website.

The 2008 Act requires the TSA to consult a number

of stakeholders or types of stakeholders before

reaching decisions. The publications and events

above comprise a significant consultation with

everyone who has an interest in the future of social

housing. The TSA is satisfied that its consultation

processes have fulfilled our obligations.

Other versions of this document

We can provide this document in large print, Braille

and audio versions on request. Other language

versions may also be available. These are available

from our customer service team on 0845 230

7000.

The regulatory framework for social housing in England from April 2010 7


Summary of key terms

This section provides a summary of the main terms

used in this document.

association or any other registered provider. In this

document, this term does not include leaseholders 3 .

The 2008 Act – the Housing and Regeneration

Act 2008. This Act established a regulator of social

housing, described in section 81 as the Office for

Tenants and Social Landlords. We call ourselves the

Tenant Services Authority. The Act also established

the Homes and Communities Agency (HCA), which

is responsible for public investment in housing and

regeneration.

TSA – the Tenant Services Authority, the new

regulator for social housing in England. Regulation

was previously undertaken by the Housing

Corporation in relation to housing associations.

The TSA has been given new powers, duties, and

objectives under the 2008 Act.

Social housing – this includes low-cost rented

housing, low-cost home ownership and most other

housing owned by existing registered social landlords

(social housing is defined in sections 68 to 77 of the

2008 Act) 2 .

Tenant – a resident in social housing, whose

provider could be a local authority, housing

Provider – this means a registered provider

within the definition in the 2008 Act. All providers

registered with the TSA as of 31 March 2010 are

automatically registered as providers on 1 April

2010. As a result of Parliamentary approval in March

2010, all local authority providers are automatically

registered too (whether the local authority manages

its homes directly or where these services are

provided by an Arm’s-Length Management

Organisation or Tenant Management Organisation).

New applicants to be a registered provider after

1 April 2010 must meet the eligibility in the 2008

Act and registration criteria set by the TSA, except

local authorities who provide or intend to provide

social housing and who are subject to compulsory

registration.

ALMO – an Arm’s-Length Management

Organisation, established by local authorities as

management agents of their stock. ALMOs that

do not own stock will not be registered under the

2008 Act and hence will not be the legal entity

responsible for meeting the standards (it will apply

to the sponsoring local authority). The same principle

applies to Tenant Management Organisations

(TMOs).

2

Section 68 of the 2008 Act results in some leasehold properties being included within the legal definition of ‘social housing’. These are

mainly shared ownership properties. It also includes (1) those RSL properties where grant (including as defined in section 77(3) of the Act)

has been paid and where the leaseholder owns 100% of the equity in their dwelling or (2) it is owned under equity percentage arrangements.

None of our standards under section 193 apply to these two groups. We call these “100% ownership leaseholders” for the purpose of this

document.

3

Relevant powers in the act focus on the tenants of low-cost rented accommodation and low-cost home ownership, not 100% ownership

leaseholders. This reflected the government’s view that these leaseholders had a degree of choice to move out of their homes, unlike most

tenants in the sector, and are protected by contract and other legislation. We recognise that many areas of social housing have a mixture of

tenures and our regulation, designed to improve outcomes for tenants, may well have positive effects for leaseholders.

8


1 The TSA’s approach to regulation from

April 2010

1.1 This section sets out the ten principles that

will underpin our approach to regulation from April

2010.

I. ‘Co-regulation’ is the TSA’s approach – we

expect robust self-regulation by the boards

and councillors who govern the delivery of

housing services, incorporating effective

tenant involvement, subject to a ‘backbone’ of

regulation by the TSA.

1.2 Tenants and providers can expect the following

from our approach to co-regulation.

• Providers will need to ensure for their tenants

that they are meeting the obligations contained

within the TSA’s six standards. These have been

influenced by our National Conversation that

helped us establish tenants’ priorities. They

are also designed to help us further our ten

fundamental objectives in the 2008 Act 4

The TSA standards place a strong emphasis

on providers involving their tenants to shape

local delivery to local priorities and scrutinise

performance. The primary focus for discussions

on service delivery and improvement should be

between providers and their tenants rather than

between the regulator and the provider

• Responsibility for meeting these standards

lies with the boards and councillors that

govern providers’ service delivery. Essential

elements of co-regulation must include honest

and robust self-assessment that is evidence

based. Providers should use external validation,

independent audit and peer review where

appropriate. Providers will report performance

against all the standards annually to their tenants

to strengthen their accountability. Tenants will be

involved in the development and scrutiny of this

report

• Tenants should have the ability to monitor and

scrutinise their provider’s performance against

all the standards. Providers will also provide

support tenants to build their capacity to make

co-regulation effective

• Tenants who are not happy with their provider’s

service or approach to co-regulation can make

a complaint to the provider. Our standards

require providers to have a clear and accessible

complaints policy so tenants know how they can

raise concerns and have them dealt with fairly

and promptly. If a tenant remains unsatisfied

after complaining to their provider, they have

the right to raise their concern with the relevant

housing ombudsmen

• Although the TSA does not deal with complaints

related to service failure (as this is the role of

the provider and relevant ombudsman), where

tenants or the ombudsmen have evidence or

grounds to suspect that a provider has systemic

compliance issues with one or more of our

regulatory standards, and/or other issues of

regulatory concern, they can raise these with the

TSA for us to consider whether to pursue this

with the provider

4

Section 86

The regulatory framework for social housing in England from April 2010 9


• Where problems are identified with a provider’s • targeting inspection on those providers where

performance (from whatever source), they will we have reason or grounds to suspect that they

as far as possible be given the opportunity to may not be meeting our standards, rather than

correct issues speedily themselves and take inspecting as a routine activity

responsibility for their self-improvement, with the • moving to using general consents for some

prospect of intervention or enforcement from of our work on providers’ disposals of their

TSA only where they fail to do so. Our regular stock rather than, as now, relying on individual

dialogue with providers should mean that in consents. For example, greater use of the

most cases performance is discussed with the general consent will remove the obligation on

provider before we make a decision on whether providers to seek from the TSA a minimum of

to commission an inspection

1,000 individual consents annually

1.3 This new co-regulatory framework includes a 1.4 The principles of better regulation, such as

clear focus on deregulation and reducing burdens 5 . transparency, proportionality and accountability, are

For example, we are:

embedded within the regulatory framework and the

way the TSA regulates in practice.

• basing our new standards on outcomes

and seeking to avoid prescriptive process 1.5 Our approach to co-regulation extends to

requirements

the development and review of regulatory policy

• not issuing any TSA codes of practice that relate and how we regulate in practice. The degree of

to our new standards

consensus we have been able to achieve in the

• removing the requirements from previous new framework has only been possible because of

guidance and Circulars issued by the TSA’s the close engagement we have had with our key

predecessor body, the Housing Corporation. This stakeholders.

amounts to the Regulatory Code and guidance;

54 Circulars from a total of 58 6 are withdrawn 1.6 The regulatory standards framework should

from April 2010 (a full list is provided at Annex be reviewed after three years. As we develop our

2), along with all previous Good Practice Notes 7 co-regulatory process, some changes may be

5

Annex 3 contains our regulatory impact assessment for our decisions on the new framework.

6

Four Circulars are retained in reference to the definition, in the Government’s Direction to the TSA on rents, of rent policy and its operation.

7

Except in relation to Circulars issued by the Housing Corporation that set out regulatory requirements for the small number of co-ownership

societies it funded in the 1970s and 1980s. These societies were not regulated under the Housing Corporation’s Regulatory Code but were

required to meet the requirements in the appropriate Circulars. Property held by co-ownership societies of the current form falls outside the

remit of the 2008 Act and so we will not exercise any of our regulatory and enforcement powers in relation to these societies and our standards

will not therefore apply but we intend to maintain the integrity and continuity of the Housing Corporation’s previous approach.

10


equired within a shorter period, eg in respect of

requirements for rents following any future Direction

from the Secretary of State. If we consider changes

might be needed, we will consult on these.

II. Providers must meet our six standards. We

are primarily concerned about outcomes for

tenants, not detailed processes.

1.7 Figure 1 sets out the six TSA standards that

providers are expected to meet. Each standard is

defined in terms of required outcomes and some

specific expectations. Providers must involve their

tenants in determining how to meet the outcomes

in each of the standards. The specific expectations

are not intended to describe entirely how to meet or

comply with the outcomes. Our six standards have

regard to the desirability of providers being free

to choose how they conduct business and deliver

services. There may be some standards where it

is possible to meet the required outcomes without

necessarily meeting the specific expectations. In

Figure 1 The TSA's standards 8

Standard

1. Tenant involvement and

empowerment

Containing requirements relating to the following areas

• Customer service, choice and complaints

• Involvement and empowerment

• Understanding and responding to diverse needs of tenants

2. Home • Quality of accommodation

• Repairs and maintenance

3. Tenancy • Allocations

• Rents*

• Tenure

4. Neighbourhood and community • Neighbourhood management

• Local area co-operation

• Anti-social behaviour

5. Value for money • Value for money

6. Governance and financial viability* • Governance

• Financial viability

* This standard or part of standard does not apply to local authorities.

8

Standards 1 to 5 are set using our powers under section 193 of the 2008 Act. Standard 6 is set under our powers under section 194 of the

2008 Act.

The regulatory framework for social housing in England from April 2010 11


such circumstances, where tenants are satisfied and

their needs are not put at risk, such innovation is to

be welcomed. We would, however, expect providers

in these circumstances to justify departures and

demonstrate their effectiveness to tenants.

1.8 Three areas are subject to a Direction

issued by the Government. These are quality of

accommodation, rents and tenant involvement and

empowerment. Security of tenure is a matter for

the government and the drafting of the outcome

in the Tenancy Standard is aimed at ensuring this

is consistent with current Government policy and

hence no changes are introduced as a result of the

regulatory standard on this issue.

framework and the independent role of the

Audit Commission in respect of local authorities’

governance, financial management and approach

to value for money. This means avoiding prescribed

national metrics outside the national indicator

set or prescribed local performance targets. In

regulating against the standards we will work

closely with the Audit Commission to avoid any

overlap or duplication, for example in relation to

its use of resources assessment and its role in

Comprehensive Area Assessments (CAA). We will

also help support the Audit Commission in its CAA

role, for example by providing information we have

on how providers generally in an area contribute to

local outcomes.

1.9 The Tenant Involvement and Empowerment

Standard is a cross-cutting standard. It contains

specific references to how, in meeting all the

standards, providers must take into account tenants’

diverse needs, including in respect of equalities

and tenants with additional support needs. It also

includes requirements in relation to local offers in a

number of areas related to the other standards.

1.10 Our regulation is ‘cross-domain’. The key aim

of regulation is to operate in a way that as far as

possible is ‘provider neutral’ so tenants receive

similar outcomes regardless of who happens to

be their provider. Our standards are designed to

support the principles of the local performance

III. We expect providers to engage meaningfully

with tenants and offer them opportunities to

agree how service delivery against the TSA

standards can be tailored to reflect local

priorities.

1.11 There are many cases where a ‘one size fits

all’ approach to service delivery will not meet the

varying needs of tenants in social housing. We

require providers to consult with tenants on local

priorities under the following TSA standards: (i) the

Tenant Involvement and Empowerment Standard,

(ii) the Home Standard and (iii) the Neighbourhood

and Community Standard 9 . This does not prevent

9

This is the same as our November proposals, except the Value for Money Standard is now no longer subject to our local tailoring

requirement.

12


providers and their tenants agreeing local offers

on a range of other issues. However, these will not

form part of the providers’ regulatory obligations.

We set out our approach to ensuring providers take

account of local priorities for tenants, within our

wider approach to our standards, in figure 2.

IV. Every tenant matters. We expect providers

to understand and respond to the particular

needs of their tenants and to demonstrate

how they have taken into account the needs of

tenants across the seven 10 equality strands.

1.12 The TSA is unequivocally and positively

committed to diversity in all our work. Our regulatory

philosophy is influenced by wider principles of

public service, which focus on fairness, universality

and accountability. In order to meet these values,

the TSA is firmly committed to equality and diversity

throughout our work and practice through our

single equalities scheme. Communities are made

up of people from different backgrounds and

experiences. Many people have care or support

needs. Ensuring that this diversity is reflected in our

work and that of providers is central to our vision.

We support effective and inclusive approaches to

both equality and diversity, and tenants with care or

support needs.

1.13 Understanding the needs of all tenants is

essential for providers and forms a cross-cutting

requirement that applies to all our standards.

This includes the needs of people drawn from

the seven equality strands: race, disability, sexual

orientation, age, gender, religion or belief and

gender identity. The Tenant Involvement and

Empowerment Standard makes it clear that in

meeting all the standards, providers must take into

account equality and diversity and tenants with

care or support needs.

V. Good governance is a universal principle and

is essential to the quality of service delivery,

financial robustness and value for money.

1.14 The 2007 Cave Review and the 2008 Act

recognise that the bedrock of excellent service

delivery is good governance, financial strength

and value for money. For the housing association

sector, we will continue to have a strong focus on

governance and viability matters.

1.15 Although we do not have specific powers

to set standards for governance and viability for

local authority providers, the principles of good

governance and financial strength are universal.

Given the strong link between service delivery

and good governance, we will work closely with

the Audit Commission in supporting their role

overseeing local authorities’ leadership and financial

matters, with a shared aspiration of helping to

ensure all tenants receive the quality of service

10

The current equality laws give public bodies responsibilities in relation to race, gender and disability in policy making, delivery of services

and public sector employment. In the planned Equality Bill the three duties are due to be harmonised into one duty that will cover all seven

equality strands.

The regulatory framework for social housing in England from April 2010 13


they deserve. Where through our work we have

reason to be concerned there may be an issue with

governance and/or financial management for those

providers where these standards do not apply, we

will refer the matter the Audit Commission.

VI. Transparency, effective tenant scrutiny,

and an element of independent validation are

central to our new co-regulatory framework.

This includes providers setting out their

service offers and reporting performance to

their tenants (and to local authorities in their

strategic role).

1.16 All standards (except for the Governance and

Financial Viability Standard) have a requirement that

providers must set out their service offer for their

tenants and then meet these commitments.

1.17 All providers should by 1 October in each

year publish a report for their tenants (and shared

with the TSA) on how they are meeting the TSA

standards, including their local offers. We do not

want to be overly prescriptive as to the format of

this report. As far as possible, we expect providers

to use information that is already collected and

is therefore ‘used and useful’. This report must

set out how the provider is currently meeting the

TSA standards, including how they measure their

compliance against the standards. It should note

any gaps and associated improvement plans. It

should also include the provider’s offer to tenants

against the standards over the next year, including

local service offers. The reports must set out the

way in which the provider has provided opportunities

for tenants to scrutinise performance and how they

have made use of external validation, peer review

and benchmarking. We will adopt a proportionate

approach to reporting requirements for those

providers owning fewer than 1,000 properties.

1.18 The report must say how tenants have been

involved in producing and scrutinising the report.

To support this, the TSA will work with stakeholder

partners, tenants and landlords to develop

approaches to annual reports that assist in their

preparation in a co-regulatory manner.

VII. We will encourage effective forms

of independent validation, audit and

benchmarking of performance to encourage

providers to improve continually and free the

best from unnecessary red tape.

1.19 The TSA will work with tenants, providers and

other stakeholders to promote effective forms of

validation and peer review that best support the

standards framework. The TSA will not support

any one validation model. We will publish findings

of current models and core features that landlords

and tenants should consider in whether to use such

approaches to support their co-regulatory approach.

1.20 The TSA will also promote continuous

improvement for the quality of service all tenants

receive. We recognise that there are many routes to

improvement and it is important that providers are

able to choose approaches that match their culture

and values. The TSA will work with stakeholders to

identify gaps in good practice and how best these

can be filled. We will also share where we, and the

Audit Commission, find helpful examples of activity.

14


Finally, we will promote the availability of good

practice to tenants.

VIII. For the service delivery standards, our

focus and resources will be targeted in a riskbased

way on those providers with the most

challenging performance issues.

1.21 Providers are expected to meet all the

requirements of all the applicable TSA standards.

All tenants deserve a good quality service and

many already receive this from their provider. We

wish to prioritise our focus on raising the standard

of service for those tenants that are not currently

getting a good deal from their provider. We know

that performance can vary across the range of

activities of a provider and from place to place. By

concentrating on areas of poor performance we

will be acting proportionately ensuring we focus

our energies where they are most likely to promote

better outcomes for tenants. Inspection will be

targeted predominantly where we have grounds to

suspect performance concerns with respect to the

standards, rather than used in a routine way.

1.23 In considering any intervention or enforcement

activity, we will act in a proportionate way. We may

consider the use of our more formal regulatory

and enforcement powers where there is reason to

believe that self-improvement is not appropriate (for

example, where it is necessary to protect tenants

from immediate harm or to protect public funds),

or where opportunities for self-improvement have

not resulted in improved outcomes, or where the

improvement plans of the provider are not credible.

X. We intend to expand the range of providers

that own and manage social housing.

1.24 From 1 April 2010, a broader range of

providers, such as profit-making organisations, will

be able to register with the TSA. The entry of new

forms of provider will create greater competition

and encourage innovation and the delivery of

greater value for money by existing providers. The

discretionary registration criteria we have set are

related to a provider’s ability to meet our standards.

IX. We support the principle of sector-led

improvement.

1.22 We want providers take ownership for the

improvement of their services and performance

against the standards. Where problems are

identified by the TSA, the provider will be offered an

opportunity for speedy self-improvement, working

with relevant agencies as appropriate.

The regulatory framework for social housing in England from April 2010 15


Figure 2 The TSA’s approach to ensuring service delivery against the standards

reflects local priorities

A - Providers set out their offer to their tenants and deliver it

There is a requirement in five TSA standards (those relating to service delivery) for each provider to set

out in an annual report for their tenants how their service offer meets their obligations for each of the

TSA’s standards and any improvements planned for tenants over the next year. Providers are expected to

deliver on these commitments 11 and be accountable for their compliance with all the standards in all areas

where they operate.

B - A clear timetable for making offers and reporting performance to tenants

An annual report for each year ending 31 March should be made available to tenants by no later than

1 October 12 . We have established high-level expectations for the contents of these reports 13 . For the

first report in October 2010, we expect providers to set out their plans for developing local offers. We

would be prepared to accept limited extensions to this date in the first year only, where the provider can

demonstrate this is reasonable and has advised its tenants and us in advance 14 . Local offers for service

delivery should be in place by 1 April 2011.

C - Meaningful engagement with tenants

The Tenant Involvement and Empowerment Standard requires all providers to offer their tenants

opportunities to agree how some services can be tailored to meet local priorities. Where tenants want

local tailoring and choices to reflect their priorities, the provider should consult meaningfully with their

tenants and act reasonably to develop a local offer in response. Our expectation is that in most cases

providers will reach agreement with their tenants on these local offers. Providers should take into account,

and discuss with their tenants, their obligations to the other standards, including value for money 15 . The

TSA cannot compel ‘agreement’ of local offers because we cannot regulate for the degree of acceptance

by tenants. Where agreement cannot be reached, we encourage the providers and their tenants to seek

independent mediation. There is a requirement that tenants are involved in the preparation and scrutiny of

their provider’s annual report and that providers set out in their reports how this has been achieved.

11

This is a new requirement compared to our November proposals.

12

Rather than July, as per our November proposals.

13

See figure 3 in section 3.

14

This gives providers more flexibility compared to the November proposals.

15

This is the same as our November proposals with the exception of a new clause that the provider should act reasonably in making an offer

for local tailoring, which is qualified by the expectation that they will take into account their other obligations including value for money.

16


D - Providers and tenants discuss appropriate arrangements, within a broad framework set by the TSA

The content of local offers is a matter for providers to agree in consultation with their tenants. We expect

discussions to cover a number of areas related to the TSA standards: specifically those related to the

Tenant Involvement and Empowerment, Home and Neighbourhood and Community Standards. There is a

requirement in the Tenant Involvement and Empowerment Standard for providers, in offering opportunities

for their tenants to agree local offers, to take into account: (i) standards of performance offered to

tenants, (ii) how performance will be monitored, reported to and scrutinised by tenants, (iii) what happens

if local offers, having been agreed with tenants, are not met, which may include redress for tenants, and

(iv) the arrangements for reviewing local offers on a periodic basis 16 . There is also a requirement within

the Tenant Involvement and Empowerment Standard for providers to say how they will provide support to

build tenants’ capacity so they are effectively engaged and involved 17 .

E - The definition of what is ‘local’ is for providers and their tenants

It is not for the TSA to define this, but we expect providers to consider their obligations under the

Neighbourhood and Community Standard in relation to local area co-operation, which requires meaningful

co-operation with Local Strategic Partnerships and the strategic housing function of local authorities.

Providers should therefore consider whether services to the tenants could be improved by participating

in an area-based offer. In these cases it may be reasonable for a provider to define ‘local’ as the local

authority area or a subset of it, such as a neighbourhood or estate. Providers are not under a regulatory

obligation to agree local offers with local authorities. We recognise that some providers may want to tailor

their services by factors other than geography such as in relation to demographics (eg older tenants).

Some providers may also, having properly involved and consulted their tenants, decide not to have a local

offer where tenants expressly do not want one.

F - What happens if there is a failure to deliver on commitments made in an agreed local offer?

We want co-regulation between providers and tenants to work to resolve the issue. In doing so, we expect

the provider to comply with its own scrutiny and redress provisions that it has agreed with its tenants.

We also expect providers to take ownership for their self-improvement in such circumstances. Only in

exceptional cases (such as when the provider is not delivering services in line with the outcomes set out

in the TSA standards and has failed to address this), and where it is reasonable and proportionate will the

TSA consider more formal intervention.

16

This is the same as the November proposals with the exception that we are requiring review on a periodic basis that can be agreed

between providers and their tenants, but this does not have to be on an annual basis.

17

This is the same as the November proposals.

The regulatory framework for social housing in England from April 2010 17


G - Local delivery will help inform our view of a provider’s compliance with the TSA’s standards

Although we will not regulate the delivery of individual local offers we expect to take into account a

provider’s performance as context for our overall assessment of its performance with regard to the TSA

standards 18 .

H - Tenants of smaller providers deserve the same outcomes

Every tenant matters, so our expectations for local offers will apply to those owning fewer than 1,000

properties. They will, however, be subject to proportionate reporting requirements. The very smallest

providers, those owning fewer than 25 properties, do not need to produce an annual report to their

tenants.

I - TSA will promote good practice to help inform local offers

As part of our commitment to co-regulation, the TSA will work with the sector to promote information

about local offers. This will include communicating the results of our ‘local standards’ pilots set up

through Tenant Excellence funding. The results will be published in May 2010 along with a toolkit and a

programme of dissemination events.

18

This is the same as we intended in our November proposals (though we accept the feedback from some respondents that the articulation

was not as clear as it could have been).

18


Further development of the

regulatory framework in 2010-11

1.25 We will continue to develop some elements

of the new regulatory framework in 2010-11. This

includes:

• our equalities impact assessment, which will

set out in spring 2010 how the new regulatory

framework and how we put it into practice will

take into account our objectives of promoting

equalities and diversities. A progress report is set

out in Annex 4

• supporting providers to develop good practice

approaches to their annual report to tenants

• our joint review of inspection methodology

with the Audit Commission. This is aimed at

ensuring that the methods used for inspection

are consistent with the outcome-focused nature

of the new regulatory standards. A consultation

paper will be published in May 2010

• our methodology for identifying those providers

with the greatest risk of failing our standards will

be published by 30 June 2010. This will be used

to allocate our resources in a proportionate way

to areas where they will have most impact

• a statement by 30 June 2010 on how registered

providers can appeal in a more proportionate

manner against regulatory judgements and

decisions before the statutory routes of redress

in the 2008 Act are triggered

• working with the respective ombudsmen,

National Tenant Voice (NTV), Tenant Participation

and Advisory Service (TPAS), Tenants and

Residents of England (TAROE), Chartered

Institute of Housing (CIH) and others to support

the best signposting of tenants to the most

appropriate way to resolve their complaints

• our approach to ring-fencing arrangements

for certain providers who are part of corporate

structures that are not regulated by the TSA

• our approach to how we grade our assessments

of providers’ performance against the

Governance and Financial Viability Standard (not

applicable to local authorities), linking also to our

financial regulation information strategy which

we will publish for discussion by 30 June 2010

• exploratory background to a potential future fee

charging regime

• developing a strategic approach to information

and data

• work with the Charity Commission and

stakeholders to gain a clear understanding of the

opportunity presented by the Charities Act 2006

for the TSA to become the principal regulator

of charitable industrial and provident societies

which are also registered social housing

providers (‘exempt charities’)

1.26 Our three-year corporate plan sets out our

wider work programme in more detail.

The regulatory framework for social housing in England from April 2010 19


2 Standards for registered providers

2.1 This section sets out the standards 19 that will apply from 1 April 2010 to registered providers. It also

sets out the products on which standards apply.

Tenant involvement and empowerment standard

Required outcomes

1 Customer service, choice and complaints

Registered providers shall:

• provide choices, information and communication that is appropriate to the diverse needs of their

tenants in the delivery of all standards

• have an approach to complaints that is clear, simple and accessible that ensures that complaints are

resolved promptly, politely and fairly

2 Involvement and empowerment

Registered providers shall support co-regulation with their tenants by:

• offering all tenants a wide range of opportunities to be involved in the management of their housing,

including the ability to influence strategic priorities, the formulation of housing-related policies and the

delivery of housing-related services

• consulting with their tenants and acting reasonably in providing them with opportunities to agree local

offers for service delivery

• providing tenants with a range of opportunities to influence how providers meet all the TSA's standards

and to scrutinise performance against all standards and in the development of the annual report

• providing support to tenants to build their capacity to be more effectively involved

3 Understanding and responding to the diverse needs of tenants

Registered providers shall:

• treat all tenants with fairness and respect

• demonstrate that they understand the different needs of their tenants, including in relation to the seven

equality strands and tenants with additional support needs

19

Sections 193 and 194 of the Housing and Regeneration Act 2008.

20


Registered providers shall set out in an annual report for tenants how they are meeting these obligations

and how they intend to meet them in the future. The provider shall then meet the commitments it has

made to its tenants. Registered providers shall take the obligations of the Tenant Involvement and

Empowerment Standard into account in setting out how they are meeting and intend to meet all the other

TSA standards.

Specific expectations

1 Customer service, choice and complaints

1.1 Registered providers shall provide tenants with accessible, relevant and timely information about:

• how tenants can access services

• the standards of housing services their tenants can expect

• how they are performing against those standards

• the service choices available to tenants, including any additional costs that are relevant to specific

choices

• progress of any repairs work

• how tenants can communicate with them and provide feedback

• the responsibilities of the tenant and provider

• arrangements for tenant involvement and scrutiny

1.2 Providers shall offer a range of ways for tenants to express a complaint and set out clear service

standards for responding to complaints, including complaints about performance against the standards,

and details of what to do if they are unhappy with the outcome of a complaint. Providers shall inform

tenants how they use complaints to improve their services. Registered providers shall publish information

about complaints each year, including their number and nature, and the outcome of the complaints.

Providers shall accept complaints made by advocates authorised to act on a tenant’s/tenants’ behalf.

The regulatory framework for social housing in England from April 2010 21


2 Involvement and empowerment

2.1 Registered providers shall consult with tenants on the desirability and scope of local offers in relation

to services to meet the following TSA standards: Tenant Involvement and Empowerment, Home and

Neighbourhood and Community. In providing opportunities for tenants to agree local offers by no later

than 1 April 2011 they shall offer commitments on:

• local standards for performance

• how performance will be monitored, reported to and scrutinised by tenants

• what happens if local offers are not met (including procedures of redress)

• arrangements for reviewing the local offers on a periodic basis

2.2 Registered providers shall enable tenants' opportunities to scrutinise the effectiveness of their policies

in relation to tenant involvement.

2.3 Registered providers shall inform tenants about the results of their consultations on issues related to

the standards.

2.4 Registered providers shall consult with their tenants, setting out clearly the costs and benefits of

relevant options, if they are proposing to change their landlord or when proposing a significant change in

their management arrangements.

2.5 Registered providers shall consult tenants at least once every three years on the best way of involving

tenants in the governance and scrutiny of the organisation’s housing management service. They shall

ensure that any changes to tenant involvement in governance and scrutiny leads to an enhancement of

the overall effectiveness of their approach.

3 Understanding and responding to diverse needs

3.1 Registered providers shall demonstrate how they respond to tenants’ needs in the way they provide

services and communicate with tenants.

22


Home standard

Required outcomes

1 Quality of accommodation

Registered providers shall:

• ensure that tenants’ homes meet the standard set out in section 5 of the Government’s Decent Homes

Guidance 20 by 31 December 2010 and continue to maintain their homes to at least this standard after

this date

• meet the standards of design and quality that applied when the home was built, and were required

as a condition of publicly funded financial assistance 21 , if these standards are higher than the Decent

Homes Standard

in agreeing a local offer, ensure that it is set at a level not less than these standards and have regard

to section 6 of the Government’s Decent Homes Guidance

2 Repairs and maintenance

Registered providers shall:

• provide a cost-effective repairs and maintenance service to homes and communal areas that responds

to the needs of, and offers choices to, tenants and has the objective of completing repairs and

improvements 'right first time'

• meet all applicable statutory requirements that provide for the health and safety of the occupants in

their homes

Registered providers shall set out in an annual report for tenants how they are meeting these obligations

and how they intend to meet them in the future. The provider shall then meet the commitments it has

made to its tenants.

20

Decent Homes Guidance means A Decent Home: Definition and Guidance for Implementation, published by the Department for

Communities and Local Government in June 2006, and any guidance issued by the department or its successors, in relation to that document.

21

Financial assistance is defined in section 19(3) of the Housing and Regeneration Act, 2008. For the purpose of this standard it means

financial assistance provided by the Homes and Communities Agency and its predecessor bodies.

The regulatory framework for social housing in England from April 2010 23


Specific expectations

1 Quality of accommodation

1.1 The TSA may agree with a registered provider an extension to the 31 December 2010 date where

this is reasonable. Providers shall ensure their tenants are aware of the reasons for any extension given.

2 Repairs and maintenance

2.1 Registered providers shall ensure a prudent, planned approach to repairs and maintenance of homes

and communal areas. This should demonstrate an appropriate balance of planned and responsive repairs,

and value for money. The approach should include: responsive and cyclical repairs, planned and capital

work, work on empty properties, and adaptations.

2.2 Registered providers shall co-operate with relevant organisations to provide an adaptations service

that meets tenants’ needs.

24


Tenancy standard

Required outcomes

1 Allocations

Registered providers shall let their homes in a fair, transparent and efficient way. They shall take into

account the housing needs and aspirations of tenants and potential tenants. They shall demonstrate how

they:

• make the best use of available housing

• are compatible with the purpose of the housing

• contribute to local authorities’ strategic housing function and sustainable communities

There should be clear application, decision-making and appeals processes.

2 Rents

Registered providers shall charge rents in accordance with the objectives and framework set out in the

Government’s Direction to the TSA of November 2009.

3 Tenure

Registered providers shall offer and issue the most secure form of tenure compatible with the purpose

of the housing and the sustainability of the community. They shall meet all applicable statutory and legal

requirements in relation to the form and use of tenancy agreements 22 .

Registered providers shall set out in an annual report for tenants how they are meeting these obligations

and how they intend to meet them in the future. The provider shall then meet the commitments it has

made to its tenants.

22

Security of tenure is a matter for the Government and the drafting of this outcome in the Tenancy Standard is aimed at ensuring this is

consistent with current Government policy and hence no changes are introduced as a result of the regulatory standard on this issue.

The regulatory framework for social housing in England from April 2010 25


Specific expectations

1 Allocations

1.1 Registered providers shall co-operate with local authorities’ strategic housing function, and

their duties to meet identified local housing needs. This includes assistance with local authorities’

homelessness duties, and through meeting obligations in nominations agreements. Where, in exceptional

circumstances, registered providers choose not to participate in choice-based lettings schemes in areas

where they own homes, they shall publish their reasons for doing so.

1.2 Registered providers shall develop and deliver services to address under occupation and

overcrowding in their homes, within the resources available to them. These services should meet the

needs of their tenants, and will offer choices to them.

1.3 Registered providers shall provide tenants wishing to move with access to clear and relevant advice

about their housing options. They shall participate in mobility schemes and mutual exchange schemes

where these are available.

1.4 Registered providers’ published policies shall include how they have made use of common housing

registers, common allocations policies and local letting policies. Registered providers shall clearly set

out, and be able to give reasons for, the criteria they use for excluding actual and potential tenants from

consideration for allocations, mobility or mutual exchange schemes.

1.5 Registered providers shall develop and deliver allocations processes in a way which supports their

effective use by the full range of actual and potential tenants, including those with support needs, those

who do not speak English as a first language and others who have difficulties with written English.

1.6 Registered providers shall minimise the time that properties are empty between each letting. When

doing this, they shall take into account the circumstances of the tenants who have been offered the

properties.

1.7 Registered providers shall record all lettings and sales in the Continuous Recording of Lettings

system.

26


2 Rents

2.1 Registered providers shall ensure they meet the following requirements, which derive from the

Government’s Direction to the TSA of November 2009 and published within Directions to the TSA –

Summary of Responses and Government Response, November 2009, CLG.

2.2 Subject to paragraph 2.3, registered providers shall set rents with a view to achieving the following as

far as possible:

2.2.1 Rents conform with the pattern produced by the rent formula set out in rent influencing

regime guidance 23 (‘target rents’) with a five per cent tolerance in individual rents (ten per cent

for supported and sheltered housing) (‘rent flexibility level’) but subject to the maximum rent

levels specified in that guidance (‘rent caps’).

2.2.2 Weekly rent for accommodation increases each year by an amount which is no more than

RPI 24 + 0.5% + £2 until it reaches the upper limit of the rent flexibility level or the rent cap,

whichever is lower.

2.2.3 Weekly rent for accommodation that has reached or is above the upper limit of the rent

flexibility increases each year by an amount that is no more than the increase to the target rents.

2.2.4 Rent caps increase annually by RPI + one per cent.

2.2.5 Target rents increase annually by RPI + 0.5%.

2.3 Where the application of the Rents Standard would cause registered providers to be unable to

meet other standards, particularly in respect of financial viability including the risk that a reduction in

overall rental income causes them to risk failing to meet existing commitments such as banking or other

lending covenants, the TSA may allow extensions to the period over which the requirements of the Rents

Standard are met.

23

‘Rent influencing regime guidance’ means the Rent Influencing Regime Guidance published by the Housing Corporation in October 2001,

and any guidance issued by the Housing Corporation or TSA, or its successors, in relation to that document.

24

‘RPI’ means the general index of retail prices (for all items) published by the Office of National Statistics or, if that index is not published for

any month, any substituted index or index figures published by that office.

The regulatory framework for social housing in England from April 2010 27


2.4 Registered providers shall provide clear information to tenants that explains how their rent and any

service charge is set, and how it is changed, including reference to the RPI benchmark to which annual

changes to rents should be linked (except where rents are controlled under different legislation).

3 Tenure

3.1 Registered providers shall publish clear and accessible policies which outline their approach to

tenancy management. They shall develop and provide services that will support tenants to maintain their

tenancy and prevent unnecessary evictions. The approach should set out how registered providers will

make sure that the home continues to be occupied by the tenant they let the home to.

28


Neighbourhood and community standard

Required outcomes

1 Neighbourhood management

Registered providers shall keep the neighbourhood and communal areas associated with the homes that

they own clean and safe. They shall work in partnership with their tenants and other providers and public

bodies where it is effective to do so.

2 Local area co-operation

Registered providers shall co-operate with relevant partners to help promote social, environmental and

economic well being in the areas where they own properties.

3 Anti-social behaviour

Registered providers shall work in partnership with other public agencies to prevent and tackle anti-social

behaviour in the neighbourhoods where they own homes.

Registered providers shall set out in an annual report for tenants how they are meeting these obligations

and how they intend to meet them in the future. The provider shall then meet the commitments it has

made to its tenants.

The regulatory framework for social housing in England from April 2010 29


Specific expectations

1 Neighbourhood management

1.1 Registered providers shall consult with tenants in developing a published policy for maintaining and

improving the neighbourhoods associated with their homes. This applies where the registered provider

has a responsibility (either exclusively or in part) for the condition of that neighbourhood. The policy shall

include any communal areas associated with the registered provider’s homes.

2 Local area co-operation

2.1 Registered providers, having taken account of their presence and impact within the areas where they

own properties, shall:

• identify and publish the roles they are able to play within the areas where they have properties

• co-operate with Local Strategic Partnerships and strategic housing functions of local authorities where

they are able to assist them in achieving their objectives

3 Anti-social behaviour

3.1 Registered providers shall publish a policy on how they work with relevant partners to prevent and

tackle anti-social behaviour (ASB) in areas where they own properties.

3.2 In their work to prevent and address ASB, registered providers shall demonstrate:

• that tenants are made aware of their responsibilities and rights in relation to ASB

• strong leadership, commitment and accountability on preventing and tackling ASB that reflects a

shared understanding of responsibilities with other local agencies

• a strong focus exists on preventative measures tailored towards the needs of tenants and their

families

• prompt, appropriate and decisive action is taken to deal with ASB before it escalates, which focuses on

resolving the problem having regard to the full range of tools and legal powers available

• all tenants and residents can easily report ASB, are kept informed about the status of their case where

responsibility rests with the organisation and are appropriately signposted where it does not

• provision of support to victims and witnesses

30


Value for money standard

Required outcome

1 Value for money

In meeting all TSA standards, including their local offers, registered providers shall have a comprehensive

approach to managing their resources to provide cost-effective, efficient, quality services and homes to

meet tenants’ and potential tenants’ needs.

Registered providers shall set out in an annual report for tenants how they are meeting these obligations

and how they intend to meet them in the future. The provider shall then meet the commitments it has

made to its tenants.

Specific expectations

1 Value for money

1.1 Registered providers shall demonstrate to their tenants:

• how expenditure has been prioritised in relation to each of the standards and in the delivery of local

offers, and in meeting other needs such as investment in new social housing provision

• how they have ensured value for money has been secured and tested

• plans and priorities for delivery of further value for money improvements

1.2 Registered providers shall have arrangements for tenants to influence the services delivered and the

cost of those services that result in service charges to tenants.

The regulatory framework for social housing in England from April 2010 31


Governance and financial viability standard

Required outcomes

1 Governance

Registered providers shall ensure effective governance arrangements that deliver their aims, objectives

and intended outcomes for tenants and potential tenants in an effective, transparent and accountable

manner. Governance arrangements shall ensure they:

• adhere to all relevant legislation

• comply with their governing documents and all regulatory requirements

• are accountable to tenants, the TSA and relevant stakeholders

• safeguard taxpayers’ interests and the reputation of the sector

• have an effective risk management framework

2 Financial viability

Registered providers shall manage their resources effectively to ensure their viability is maintained.

Specific expectations

1 Governance

1.1 Registered providers shall adopt and comply with an appropriate code of governance. They shall give

the reasons for their choice and explain areas of non-compliance with their chosen code.

1.2 Registered providers shall establish and maintain clear roles, responsibilities and accountabilities for

their board, chair and chief executive and produce an annual assessment of the effectiveness of their

arrangements.

1.3 Registered providers shall submit an annual return, on an accurate and timely basis in a form

determined by the TSA. This is currently the Regulatory and Statistical Return (and its successor, the

National Register of Social Housing).

32


1.4 Where there is a non-regulated element 25 , the registered provider shall demonstrate to the TSA that

it has in place effective mechanisms (such as commitments, undertakings or other assurances between

itself and the non-regulated element) which ensure that:

1.4.1 it is and will be able to comply with the TSA's standards and other regulatory requirements.

1.4.2 its ability to meet the TSA's standards and other regulatory requirements is not and cannot

be prejudiced by the activities or influence of the non-regulated element.

1.4.3 in the event that the registered provider does not or may not be able to comply with the

TSA’s standards or other regulatory requirements:

a. the non-regulated element will give any necessary support or assistance to enable

compliance.

b. the registered provider has the ability to require the support or assistance of the nonregulated

element to enable compliance.

In some situations it may be appropriate for the TSA to be a party to such arrangements.

2 Financial viability

2.1 Registered providers shall ensure that:

• effective controls and procedures are in place to ensure security of assets and the proper use of public

funds

• effective systems are in place to monitor and accurately report delivery of their plans

• the risks to delivery of financial plans are identified and effectively managed

25

A “non-regulated element” refers to the activities, organisations or parts of organisations carrying out non-social housing activity within an

organisation:

(1) which is a registered provider and which also carries out activities which are not regulated by the TSA;

(2) which is not a registered provider but which has as part of its organisation, corporate structure or group of organisations, a registered

provider; or

(3) which is a registered provider and is controlled or substantially influenced by another organisation which is not a registered provider.

The regulatory framework for social housing in England from April 2010 33


2.2 Registered providers shall ensure that they have a robust and prudent business planning and control

framework. Through this framework they will ensure:

• there is access to sufficient liquidity at all times

• financial forecasts are based on appropriate and reasonable assumptions

• planning sufficiently considers the financial implications of risks to the delivery of plans

• they monitor, report on and comply with their funders’ financial covenants

2.3 Registered providers shall provide to the TSA accurate and timely statutory and regulatory financial

returns and an annual report on any losses from fraudulent activity.

34


Summary of how the standards

apply to different types of

provider and products

2.2 This section sets out the way in which the

standards apply in respect of different types of

provider or different types of social housing 26 .

Table 1 Application of standards to different types of provider and social housing

Standard

Involvement and

empowerment

Does the

standard

have crosscutting

elements

across all

standards?

Apply

to local

authorities?

Apply to

non-profit

registered

providers

(RPs)?

Apply to

for-profit

RPs?

Apply to

low-cost

rental?

Apply to

low-cost

home

ownership

or

intermediate

rent 27 ?

Yes Yes Yes Yes Yes Yes

Home No Yes Yes Yes Yes Yes

Tenancy 28

No

Yes (apart

from rents)

Yes Yes Yes No

Neighbourhood

and community

No Yes Yes Yes Yes Yes

Value for money Yes Yes Yes Yes Yes Yes

Governance and

financial viability

Yes No Yes Yes Yes Yes

26

This is the same as our November 2009 proposals.

27

See footnote 2 in the summary of key terms for scope of application of standards.

28

The basis on which we consulted specifically noted that we did not propose to apply the Tenancy Standard to low-cost home ownership

and intermediate rent products. We confirm that the Tenancy Standard will not apply to these products. We will work with the HCA to

consider the best approach to setting out requirements that will be proportionate and effective.

The regulatory framework for social housing in England from April 2010 35


3 Supporting improvement and monitoring

performance against the standards

3.1 In this section we set out how we will support

providers’ self-improvement. We also outline the

principles by which the TSA will seek to assess

compliance against the standards. We will provide

further details about our risk methodology for

monitoring compliance and prioritising the use of

our resources in summer 2010.

Promoting sector-led

improvement and good practice

3.2 It is providers’ responsibility to determine

how they develop a systematic approach to selfimprovement

and learning from each other through

peer review and benchmarking. They must have

effective tenant and other scrutiny mechanisms,

including, for example, self-assessment, board or

councillor scrutiny, tenant scrutiny of performance

and have considered the use of external validation

and accreditation services. It is also providers’

responsibility to set out how they will improve their

services and develop their accountability for this to

their tenants, particularly through their approach to

establishing local offers.

3.3 Local authorities have access to well-structured

support for the improvement agenda from a

number of agencies, such as the Improvement

and Development Agency (IDeA) and Regional

Improvement and Efficiency Partnerships (RIEPs).

Providers should make best use of these existing

initiatives and determine how these approaches and

resources can be used to improve performance,

working in partnership with each other and with

their representative organisations.

3.4 The TSA’s ‘excellence’ work will develop a

source of information on current good practice.

We will support sector-wide improvement and

our Tenant Excellence Fund will be targeted at

those areas where we identify a need to fill a

gap to support landlords and tenants to meet the

needs of the regulatory framework. The Tenant

Empowerment Programme will help to support

tenants and tenants’ groups to build capacity and

develop tenant scrutiny. We will promote others’

work in developing excellence across the standards

framework and help communicate this to providers

and tenants. We will work closely with the Audit

Commission and signpost providers and tenants

where we have identified useful examples of good

practice. We do not intend or pretend to be the

sole source of good practice in the sector and we

will support the work of others such as the CIH,

TPAS, the National Housing Federation (NHF) and

Local Government Association (LGA) in promoting

excellence for all.

3.5 Our approach to continuous improvement

includes:

• the publication of annual reports of performance

against each TSA standard by providers to

improve the transparency of performance

measurement and allow boards and councillors

to develop service improvement plans based on

a clearer understanding of what other providers

are able to achieve

• using our Tenant Excellence Fund to identify,

recognise and share good practice in the sector

• through the Tenant Involvement and

Empowerment Standard, tenants will be

36


supported to work with boards and councillors to

assess their performance and develop standards

that lead to improvements in service delivery

• by freeing providers from red tape and process

prescription providers will be better able to

develop new and innovative approaches to

service delivery which may lead to better

outcomes than would otherwise be the case in

the previous regulation and inspection regimes

• developing our web portal to offer more valuable

information on performance of providers at the

local level

• reviewing the frequency and relevance of tenant

satisfaction data

• working with others to assess the scope for

external and robust accreditation

• considering with others where there are

incentives that can be focused on excellent

performance

The TSA’s general approach to

assessing compliance

3.6 We will base our approach on the following

information:

• Annual reports. We will place reliance on

providers’ annual report to their tenants

that contains their self-assessment of their

performance against the standards. The level

of assurance that we gain from this selfassessment

will be influenced by the degree

to which providers are transparent, involve their

tenants in scrutinising performance and adopt

external validation such as benchmarking, peer

review and third party accreditation. The 2008

Act 29 gives us the power to require providers

to prepare an annual report assessing their

performance against the standards. We can

also specify matters covered in this report and

the period within which the report should be

submitted to the TSA. Our guidance 30 for how we

will use this power is set out in figure 3

• Performance outcomes promised to tenants.

The service delivery standards require providers

to use their annual report to set out for tenants

how their service offer meets their obligations for

these standards, and deliver these commitments.

In assessing compliance with the standards, we

will take into account providers’ response to this

requirement and the outcomes they deliver. As in

all our regulatory judgements, we will take a riskbased

and proportionate approach in considering

any further regulatory intervention in respect of

providers’ performance on their commitments.

We want an approach that encourages providers

to aspire to better service outcomes and avoids

perverse incentives from regulation

• Existing information sources. For at least

2010-11 we will rely on data requirements and

returns as currently specified for providers. Some

29

Section 204.

30

Section 215(b).

The regulatory framework for social housing in England from April 2010 37


of this information for housing associations

is collected through our Regulatory and

Statistical Return and the financial information

returns. Some of the information related to

local authorities is collected through their

HSSA and BPSA 31 returns. The TSA and the

Government use this information for statistical

purposes. This role will continue after 1 April

2010. However, this data is also used to provide

contextual information to inform regulation. For

example, information could be assessed to see

whether there are any indications of compliance

to support landlords’ self-assessment of

performance

• Analysis of complaints. We will conduct analysis

of complaints information at a sector and

provider level and this will be one of the factors

to inform our risk-based approach to regulation.

This information will include complaints received

by the TSA (including where they are signposted

to the provider with no further action from

the TSA), complaints received by the relevant

ombudsman (shared in accordance with our

memorandum of understanding), and complaints

received by providers (published in accordance

with the complaints requirements of the Tenant

Involvement and Empowerment Standard). For

further information on our approach to dealing

with complaints made to us, see section 5

• External validation. The TSA will take into

account information from providers that is

based on independent or external validation,

benchmarking, peer review etc. This includes

assessments of their involvement policies,

including, for example, any impact assessments,

amongst other things

• Negative assurance. We will place reliance in

some areas on the absence of indications of

non-compliance, rather than explicitly collecting

and assessing information

• Inspection. Information from inspection is

important to help us investigate where we have

reason to think there may be risks to compliance.

Our approach to inspection is set out in section 4

• Requests for further information. We will

reserve the right to ask for further information if

there are indications of concern from direct or

indirect sources

3.7 We must also take into account the context of

existing information in making any assessments of

whether further regulatory scrutiny or information is

required. The data may not be precisely comparable

across all providers as it may be collected on

different bases across different providers. Some

data sets also suffer time lags (eg satisfaction

surveys for some providers are currently undertaken

once every three years). Some indicators are

insufficient on their own to make a judgement

of compliance against particular standards.

Nevertheless, used intelligently and combined with

other information, rather than a deterministic tool,

such intelligence can help support the

co-regulatory engagement between providers and

tenants that is central to our regulatory approach.

31

The Housing Strategy Statistical Appendix (HSSA) and Business Plan Statistical Annex (BPSA) are completed by local authorities for CLG.

This arrangement will continue in 2010-11.

38


3.8 For the Governance and Financial Viability

Standard (which does not apply to local authorities),

providers with more than 1,000 properties will

remain subject to a level of direct scrutiny of

financial and governance performance to enable

the TSA to maintain an independent review. We

intend to continue publishing judgements for these

providers, as this is supported and valued by lenders

and providers themselves. The supply of financial

information, both annual accounts and forecast

information, will remain a key part of our regulation

of all non-local authority landlords’ governance and

viability. From 1 April 2010 we will expect the same

type of financial information as previously from

these providers. We will, also as previously, keep the

specification of these returns under review, working

with providers and stakeholders to keep them fit

for purpose, and ensure this information complies

with the general principle of ‘used and useful’. In

spring 2010 we will publish our financial regulation

information strategy for discussion, which will set

out how we intend to develop our returns and how

the data will be used.

Assessing compliance with the

Decent Homes Standard

3.9 The text of the ‘quality of accommodation’

elements of the Home Standard reflects the terms

of the Direction issued to TSA by the Secretary of

State and expresses, in the view of the Government,

what is necessary for a home to be decent. There

is also direct cross reference to the Government’s

Decent Homes Guidance.

3.10 We accept it is the case that stock that meets

the Decent Homes Standard will, without ongoing

repairs and improvements, fall below the standard

at some future point. The purpose of the terms in

which the Direction and our standard are expressed

is to ensure that there is an effective approach in

place to identify investment requirements to keep

stock at the level of the Decent Homes Standard.

Whilst the standard cannot make provision

for public funding, it is for the TSA to make a

judgement about the extent to which availability of

public funds, for council providers in particular, is

the primary or exclusive grounds for the inability to

comply with this standard.

3.11 In cases where there is insufficient funding

in place to meet the standard, the question we

will consider is not whether we will accept a local

offer that is lower than the required standard, but

whether we will agree an extension to the deadline

for reaching the standard.

3.12 Unless there are specific reasons to do

otherwise, extensions to the deadline already

agreed by the Housing Corporation or the TSA for

housing associations, or CLG for local authorities,

will continue to be valid.

The regulatory framework for social housing in England from April 2010 39


Figure 3 Guidance on annual reports to tenants 32

1 All standards (except for the Governance and Financial Viability Standard) have a requirement that

providers shall set out their service offer for their tenants and then meet these commitments.

2 All providers shall by 1 October in each year publish a report for their tenants (and shared with the

TSA) on how they are meeting the TSA standards, including their local offers. We do not want to be overly

prescriptive as to the format of this report. As far as possible we expect providers to use information that

is already collected and is therefore ‘used and useful’. This report should:

• assess how the provider is currently meeting the standards, including how they measure their

compliance

• note any gaps and associated improvement plans

include the provider’s offer to tenants against the standards over the next year, including local service

offers

3 The reports must include reference to how the provider has gained assurance on the outcomes

reported, including how tenants have been involved in scrutinising performance and, where appropriate,

use of external validation, peer review and benchmarking.

4 We will adopt a proportionate approach to reporting requirements for those providers owning fewer

than 1,000 properties. Providers with fewer than 25 properties do not need to produce a separate annual

report to their tenants 33 .

5 The report shall detail how tenants have been involved in producing and scrutinising the report. To

support this, the TSA will work with stakeholder partners, tenants and landlords to develop approaches to

annual reports that assist in their preparation in a co-regulatory manner.

6 Timetable - the annual report for each year ending 31 March shall be made available to tenants (and the

TSA) by no later than 1 October 34 .

7 For the first report in October 2010, we expect providers to set out their plans for developing locally

tailored offers and, where this is not possible, to provide a progress update for their tenants. We would

be prepared to accept limited extensions to this date in the first year only, where the provider can

demonstrate this is reasonable and has advised its tenants and us in advance 35 .

32

Section 204, Housing and Regeneration Act 2008.

33

This is a specific decision that follows from our November 2009 consultation document.

34

Rather than July as per our November proposals.

35

This gives providers more flexibility compared to the November proposals.

40


The TSA’s risk-based approach

3.13 Our risk framework will help us determine how

we:

• deploy resources most effectively to ensure we

focus on those organisations with the greatest

performance challenges

• identify the key risks currently facing social

housing, its providers and tenants (or risks that

may arise in the future) using published thematic

analyses, Tenant Excellence funding and other

ways to encourage debate and share good

practice

3.14 This risk-based approach will guide the TSA’s

engagement across all the standards, based on our

analysis of performance information in conjunction

with other sources of market intelligence, to

enable the TSA to deliver regulation effectively and

proportionately.

3.15 What this means in practice is:

• those organisations where we have no

indications of risk of standards failure, and about

whom there are no other contra-indications of

compliance, can expect to be subject to only

minimum levels of regulatory engagement

although they will benefit from our wider role on

promoting good practice and supporting delivery

of the regulatory framework

• all our engagement with providers will be risk

based and proportionate taking into account,

for the Governance and Financial Viability

Standard, recognition of their impact (by number

of homes) within the sector as a whole. We will

engage with these providers to understand their

business and future plans, whilst recognising

their responsibility to manage and control their

organisation

• those providers where there is information

suggesting cause for concern, or where we

have other evidence of poor performance, can

expect to have an increased level of regulatory

engagement, based on the general presumption

that this will initially be a dialogue to support the

providers’ self-improvement approach, prior to

any further regulatory intervention in order to

investigate the issue

3.16 We will also develop our approach to risk

scanning and analysis of emerging risks and from

time to time we will make regular statements to

the sector and its key stakeholders regarding the

main issues facing the sector. In this way we hope

to encourage debate of the issues and promote

sector-led solutions.

3.17 For non-local authority providers, compliance

with the financial obligations of the Governance

and Financial Viability Standard is so fundamental

to the delivery of other standards that the TSA will

need to ensure we regularly review and understand

the financial position of providers, which may lead

to more routine engagement on governance and

viability issues.

3.18 We will publish more detail on our risk

methodology in summer 2010 and will be in

discussions with stakeholders before then to help

us shape it.

The regulatory framework for social housing in England from April 2010 41


Publishing regulatory

assessments

3.19 The TSA is committed to being transparent in

our approach to assessing regulatory performance

by publishing our assessments of providers. We

believe that this can help inform tenants about their

provider’s performance, drive up performance of

individual providers and provide assurance to other

stakeholders regarding the position of the sector.

3.20 For many of our standards, 2010-11 will be

the first time we have assessed providers in these

areas, so it would not be appropriate for us to

publish assessments in the initial months of the

new standards framework. We expect that better

transparency and accountability should be derived

through providers’ engagement with their tenants

for their first annual reports in which they will

publish their own assessments as detailed in

figure 3.

3.21 We will continue to publish graded

assessments in relation to viability and governance

(these are not applicable to councils) as these are

key areas where lenders, boards and others value

our assessments. We will also want to take into

account other information providers have in relation

to the other standards, as detailed in their annual

report to tenants, in forming these assessments.

3.22 In order to maintain continuity and

transparency for providers, tenants and their

stakeholders, from 1 April 2010 the published

governance and viability assessments will continue

to be based on the approach to those elements in

the current TSA Regulatory Judgement product.

However, over the course of 2010-11 we will work

with stakeholders to develop both the format and

grading of these judgements to maintain them as

‘used and useful’.

3.23 We do not currently propose to publish

graded assessments of performance against other

standards and we will work with stakeholders in

2010-11 to assess whether, and if so, how best

we can add to the information that will be made

public from October 2010 on the performance of

providers against each TSA standard.

Published performance

information

3.24 The 2008 Act requires the TSA to publish, at

least annually, information about the performance

of providers. This will support co-regulation and

tenants’ empowerment by providing a source of

useful information across all providers. We intend

the information collected to be ‘used and useful’,

and in relation to local authorities, to support the

principles of the local performance framework.

3.25 Our aim is to publish, at least once a year,

information about the performance of providers

and include information that is useful to tenants,

potential tenants, providers and local authorities 36 .

Our website now enables people to ‘find and

36

Supporting our obligation under section 205.

42


compare your landlord’ using performance indicator

information based on data that is already collected.

We aim to develop this facility over time, to enhance

the range and comparability of information available

from it.

Developing a strategic approach

to information and data

low-cost rented housing under private finance

initiative arrangements

• entered into contracts with third party

organisations such as NHS Trusts or higher

education institutions to provide housing and

housing services to, for example, their employees

or students

• contracted out all or part of the provision of

management and maintenance services

3.26 To develop our co-regulatory approach with

providers and tenants, we want to develop a more

sophisticated approach to using information to

assess the market, inform wider policy and to inform

us of any compliance issues. Our aspiration over

time is to meet another of the 2007 Cave Review’s

objectives of ‘less information, but of a higher

value’. We will discuss how we might do this with

stakeholders in 2010-11.

3.27 We will also take an active interest in the

expected revision of the national indicator set for

councils, with a view to improving the fit between

prescribed national indicators and key elements of

the TSA’s standards framework.

Assessing compliance where

there are existing contractual

arrangements

3.28 This is relevant where providers have:

• commissioned the provision of housing services

in relation to the supply and management of

3.29 In these circumstances, it is our expectation

that the provider will take the agreed contractual

position as its starting point for the local offer

for homes managed under those contracts. The

commitments in those contracts should be the

basis, in the first instance, for their annual report for

tenants – subject to the terms of the contract, they

may delegate this activity to their contractor.

3.30 If providers and their contractors, in

consultation with their tenants, identify that these

contracts do not meet TSA standards, either in

terms of dealing with all the areas covered by the

standards or do not specify a sufficient quality of

housing service, we expect them to discuss this with

us in the first instance, setting out the options for

remedying the position.

3.31 The services specified in the contract and the

performance in providing those services is a matter

for the commissioner of that contract and not the

TSA. However, where the primary relationship and

payment mechanism is between the registered

provider (as landlord) and individual tenants, the

registered provider should operate on the basis that

standards apply as indicated in table 1 (see section

2).

The regulatory framework for social housing in England from April 2010 43


How we will engage with

providers

3.32 Our operational teams are structured so that

we can engage with providers in a coherent and

efficient way. We will continue to review the most

effective use of our resources to ensure the new

regulatory framework is a success and achieves

value for money.

3.33 Where our proportionate, risk-based approach

indicates direct engagement is required, whether

regularly or as a reactive response to emerging

concerns, providers will have a named individual

who will act as a point of contact for dealing with

queries and who involves, where necessary, other

staff with specialist expertise in the service delivery

standards and business or financial analysis.

3.34 Where our risk methodology indicates the

need for direct engagement with a provider, we

will at all times be clear why we consider that

engagement is necessary. Specific engagement

will be led by the appropriate staff with technical

expertise, in conjunction with the designated

relationship lead.

3.35 We will agree with providers for the

forthcoming year what is expected from them and

what they can expect from us. However, we will

keep the plan under review and reserve the right,

if any additional intelligence or information comes

to our attention indicating it should influence our

risk assessment, to consider direct or additional

regulatory engagement.

3.36 As well as our regulatory engagement, we

consider it is an important part of our work in

2010-11 to raise awareness of the new framework

and actively support, for example, the expertise and

learning derived from our pilots on local offers. We

will contact providers, offering the opportunity to

benefit from our technical expertise in the service

delivery standards, and support discussions around

these areas of the new framework. Again, we will

set out clearly the purpose and remit of these

discussions, which will not be deemed to have been

triggered by our risk assessment.

Requirements for smaller

providers (that own and manage

fewer than 1,000 homes)

3.37 All standards apply to small providers but we

have modified our requirements for small providers

in respect of providing an annual report.

• Smaller providers with fewer than 25 homes will

not be required to produce a separate annual

report but will be expected to ensure that they

provide equivalent opportunities for their tenants

or residents to discuss and agree how services

will be delivered and how they will meet the TSA

standards

• Providers with more than 500 homes in a single

council area must provide an annual report to

their tenants and make it available to TSA on the

same basis as larger providers

• Providers with fewer than 1,000 homes but

which are part of a group structure which has

more than 1,000 homes must provide an annual

44


eport to their tenants and make it available to

the TSA on the same basis as larger providers

• Other providers with fewer than 1,000 (but more

than 25) homes should provide an annual report

to their tenants covering the same matters as

for larger providers but will not be required to

provide that report routinely to the TSA. Housing

associations in this position will be required to

make certifications on the Regulatory Statistical

Return (RSR) short form broadly equivalent

to that which is already required, and smaller

council providers will continue their existing

statistical returns to the CLG. The TSA may look

at annual reports from this group of smaller

providers on a sample basis

3.38 We have a single national team offering

streamlined support arrangements for providers

with fewer than 1,000 homes. This team is

managed from our Manchester office. In general we

would expect to have little regulatory engagement

with smaller providers, only in response to specific

problems. Ongoing development plans that would

see providers owning more than 1,000 properties

in the near future may mean that reporting

requirements are increased.

3.39 We believe there may be additional measures

that we should consider with stakeholders in

2010-11 that might allow us to reduce

administrative burdens on smaller providers further

whilst ensuring that we are able to regulate the

sector effectively. These include:

• taking greater account of other systems, such

as the Almshouse Association’s Standards of

Almshouse Management and the Abbeyfield

Society’s Abbeyfield Standard, as indicators of

compliance with TSA standards, including the

Tenant Involvement and Empowerment Standard

(we already ask about this on the RSR short

form)

• taking greater account of compliance with the

quality assurance framework or Care Quality

Commission requirements in certain cases

where, for small specialist providers of housing

with care and/or support services, these

frameworks are a more relevant test of tailoring

of services to the needs of the users of those

services – we expect that this will be limited to

the smallest organisations of this kind working

with no more than one commissioning authority,

and subject to a maximum size of separate

funding contract for care or support services as

a proportion of overall turnover

• as part of our wider work on improving and

rationalising our approach to regulatory

information, identifying and exploring the

extent to which we can find better ways than

the present short form RSR for collecting

information from smaller private, not-for-profit

providers

The regulatory framework for social housing in England from April 2010 45


4 Inspection

4.1 The 2008 Act enables the TSA to arrange

for an inspection of a provider in respect of

its performance in relation to the provision of

social housing or its financial or other affairs 37 .

This section sets out our general approach to

commissioning inspections of housing services.

It should be read in conjunction with our detailed

guidance note on use of our inspection power set

out in Annex 1 38 .

How we shall commission

housing inspections from the

Audit Commission

4.2 The TSA will use the inspection process

to assess providers’ performance against our

standards and to inform key parts of our regulatory

assessment. A provider is responsible for ensuring

that the organisation achieves the standards. In

circumstances where there may have been a

failure against a standard, where the affairs of a

provider may have been mismanaged, or to verify

performance against any of the standards, the TSA

may exercise the power to inspect.

4.3 Under the 2008 Act, we must first invite the

Audit Commission to carry out inspections on our

behalf in relation to all the standards (except for the

Governance and Financial Viability Standard) 39 . This

section describes how we shall do this.

4.4 The TSA expects to commission inspections

from the Audit Commission predominantly where

we believe that a provider may be failing to meet

one or more of the standards, and it is necessary

to establish whether or not this is the case before

assessing if further action is necessary.

4.5 In our approach to inspection policy we

must be mindful that the inspection process is a

proportionate response to helping us assess a

provider’s performance against the standards.

4.6 It is therefore important to see inspection

in the broader context of how we shall assess

performance and engage with providers. Our risk

methodology should give us a good understanding

of those providers with the greatest performance

challenges against the standards, supported where

appropriate by our direct regulatory engagement.

Where we have grounds for concern we shall

be in discussion with the provider to provide an

opportunity to understand our reasons, and we

shall want to understand whether it has a credible

improvement plan in place. This engagement activity

will therefore inform our decisions over which

providers should be inspected. Equally, information

derived from an inspection will also contribute to

our assessment of a provider’s performance. This

means that providers, where we have performance

concerns, will usually have the opportunity to

37

Sections 201 to 203.

38

See The Regulatory Framework for Social Housing in England from April 2010 – Annexes to the TSA’s Regulatory Framework Document.

39

The 2008 Act does not require the TSA to invite the Audit Commission to undertake inspections in relation to the Governance and Financial

Viability Standard.

46


discuss these with us in the normal course of our

regulatory activity before we decide whether an

inspection of a provider is necessary. There may be

some circumstances where this is not possible or

appropriate because we need to act speedily and

decisively to protect the interests of tenants or the

taxpayer.

4.7 Potential grounds for us considering

commissioning an inspection of a provider’s

performance against a standard(s) could arise from

a number of sources. Examples include:

• its self-assessments and annual report to

tenants and other performance information

• Comprehensive Area Assessments (CAA)

regulatory concerns arising from complaints or a

reference from the ombudsmen

• where we have grounds to suspect that

improvement by the provider has not resulted in

compliance with the standards or is not doing so

in a timely way

4.8 The TSA will identify the main focus for the

inspection and the Audit Commission will, through

an agreed methodology, undertake the inspection

on our behalf.

4.9 We expect that most inspections we

commission from the Audit Commission will be

targeted inspections done at short notice rather

than full inspections. We will, however, use the

most appropriate inspection tool in the individual

circumstances. We expect in the majority of

circumstances to wish to inspect in relation to

service performance concerns with one or more

standards. Where we have wider systemic concerns

we may commission a wider inspection of services.

4.10 Once we have decided that an inspection of

a provider should go ahead we shall explain to the

provider the reasons for doing so.

4.11 Both the TSA and Audit Commission can

publish the reports of inspection though we shall

agree a protocol for this as part of our joint review

of the inspection methodology (see below). The

TSA is responsible for post inspection follow-up

and overseeing the implementation of any agreed

recommendations.

4.12 The Audit Commission has a ‘gate keeping’

role in relation to inspections of local authorities

(ie it co-ordinates inspections of local authorities

undertaken by a number of regulatory and

inspection bodies). The TSA is subject to this in the

same way as other inspectorates.

Review of the inspection

approach and the Audit

Commission’s KLoE

4.13 Both the TSA and Audit Commission

recognise that under the new standards and a new

regulatory approach, the methodology for inspection

will need to be changed to reflect these changes.

We have agreed to work together on a fundamental

review of the inspection methodology following

the same co-regulatory approach we have used

to develop the TSA standards. We will publish a

joint consultation document in spring 2010 and we

The regulatory framework for social housing in England from April 2010 47


anticipate the new methodology will be in place for

inspections taking place from October 2010.

draws together information and judgements from

five other inspectorates.

4.14 For the interim period between April and

October 2010, we have agreed with the Audit

Commission to use only those aspects of its Key

Lines of Enquiry (KLoE) framework that are directly

relevant to the standards within the scope of the

inspection that we have commissioned.

4.15 The TSA’s judgement will be based solely on

the new standards from 1 April 2010. In practice,

this means any aspects of a landlord service KLoE

that are not related directly to the standards upon

which the inspection is focused will not be used or

considered. There will be no new KLoE introduced

in this period in relation to the TSA’s standards.

ALMO inspections for 2010-11

4.16 As an exception to the approach above, in

2010-11 CLG-commissioned ALMO inspections

that are required for Decent Homes funding will

continue under existing arrangements. We will work

closely with CLG and the Audit Commission to limit

the risk of ‘double inspection’ of ALMOs during this

period.

How the TSA will support

the Audit Commission’s

comprehensive area assessment

4.18 The TSA’s regulation will support the Audit

Commission in its role of undertaking CAA. The

precise way in which this will work will be developed

with the Audit Commission in 2010, but it is our

expectation that area-based assessments of

this type will take into account all types of social

housing provider and the quality of services

provided to tenants in that area.

4.19 Through the TSA standards, we will ensure

that performance of providers across the full range

of services is publicly reported and the TSA will feed

any relevant information we have on providers within

an area to the Audit Commission to take account of

as part of its CAA. Regular liaison between our two

organisations will ensure that the Audit Commission

will be made aware of any concerns we have (and

areas of excellent practice).

4.20 Where the TSA identifies intelligence that

relates to concerns associated with a local

authority’s governance and/or finances, these

will be shared with the Audit Commission, so that

they can be taken into account as part of the

organisational assessment within the CAA. Similarly,

if the TSA has indications of strategic housing

concerns these will also be shared with the Audit

Commission who will consider and determine if and

what further investigation is required.

4.17 The Audit Commission leads on

Comprehensive Area Assessments (CAA) and

48


How the Audit Commission

will support the TSA’s risk

assessment of social providers

4.21 The Audit Commission will share with the TSA

information it has and collects on local authority

housing management services. This information

will contribute to the TSA’s risk methodology and

our approach to identifying those providers with the

most significant performance challenges.

4.22 CAA may have highlighted a number of

issues with a more strategic focus that also affects

housing providers within the local area, such as

the degree of local area co-operation, for example.

These areas will also be highlighted to the TSA

for further consideration and will form part of the

regulatory intelligence linked to individual providers

or sector risks/issues.

Memorandum of understanding

with the Audit Commission

4.23 The TSA and the Audit Commission

have agreed and published a memorandum of

understanding 40 describing our shared objectives

and how we will work with each other. The TSA

and the Audit Commission will work together not

just on housing inspections but also on research

studies to identify good practice and the sharing of

intelligence to ensure collaborative regulation of the

domain. Both organisations will share information

on their respective regulatory and inspection activity.

The purpose is to ensure efficient and effective

regulation and to minimise regulatory burden and

duplication on providers. Both organisations are

committed to reviewing the memorandum following

the review of the inspection methodology later in

2010.

40

Memorandum of Understanding between the TSA and the Audit Commission, July 2009, published on the TSA’s website.

The regulatory framework for social housing in England from April 2010 49


5 Complaints received by the TSA about

providers

5.1 This section comprises our guidance on how

we deal with complaints made to the TSA about the

performance of registered providers 41 .

Our approach to handling

complaints

5.2 We will handle complaints in accordance with

the policy outlined in figure 4.

Figure 4 The TSA’s approach to complaints

The primary role of providers and the ombudsmen

I

II

III

IV

V

VI

VII

A tenant with a complaint against their provider should raise it with their provider.

Providers have prime responsibility for dealing with, and being accountable for, complaints

about their service. The TSA’s Tenant Involvement and Empowerment Standard includes clear

expectations on all providers about how they handle complaints. This includes reference to

dealing with complaints about performance against the standards, which includes those related

to their obligations under the Tenant Involvement and Empowerment Standard.

A tenant not satisfied with the way their landlord has dealt with their complaint should raise it

with the relevant ombudsman.

The ombudsman will have a final say on service-related complaints. The TSA does not take on

these complaints once this process is concluded and is not an alternative route for complaints

about a provider’s service to tenants.

The Housing Ombudsman, under our memorandum of understanding 42 , can refer to the TSA

issues of regulatory concern about a provider 43 .

Where the TSA receives complaints directly we shall direct the tenant to the most effective route

for resolution via the respective provider and ombudsmen processes.

The TSA does not deal with service-related complaints on behalf of tenants or groups of tenants

– this is a role for the provider and relevant ombudsman.

41

As required by section 215(1)(a).

42

Memorandum of Understanding between the TSA and Housing Ombudsman, published August 2009, available from our website. We are

currently discussing a similar memorandum of understanding with the Local Government Ombudsman.

43

Our memorandum of understanding enables data of all complaints submitted to and/or investigated by the ombudsman to be shared with

the TSA on a quarterly basis and complaints which the ombudsman believes to be of a regulatory concern forwarded to us to consider 43 .

50


Role of the TSA

VIII

We do not investigate service complaints but where a complaint received by the TSA raises, in

our judgement, issues of regulatory concern about a provider we may pursue this directly with

that provider.

Criteria used by the TSA in deciding whether to investigate a complaint

IX

Issues of regulatory concern are related to:

• the degree to which the complaint provides evidence or grounds to suspect systemic failure

against one or more of the TSA’s standards by the provider. This includes the Tenant Involvement

and Empowerment Standard

• whether, in our judgement, it raises another serious regulatory concern such as:

- an immediate or potential risk to a tenant’s, or a number of tenants’, health and safety

- an allegation of mismanagement or fraud

- a significant risk to the reputation of the sector

We expect to discuss these complaints with the provider in the first instance. Where appropriate we will

share the outcome of the investigation with the complainant.

Collective or group complaints

X

Collective complaints will not be treated differently by the TSA to individual complaints, although

they may help highlight the scale of tenants’ concerns.

The procedure for contacting the

TSA

5.3 Issues of potential regulatory concern can be

raised with the TSA in a number of ways:

• Telephoning 0845 230 7000 and speaking to

the TSA’s customer service team between the

hours of 8.30am to 5.00pm (Mon – Fri)

• Writing to: Customer Service Team, TSA, 1

Piccadilly Gardens, Manchester M1 1RG

• Emailing enquiries@tsa.gsx.gov.uk

• Via our website www.tenantservicesauthority.org

5.4 Any person or organisation can bring an issue

to the TSA’s attention. This includes from elected

local councillors and Members of Parliament as

advocates on behalf of tenants within their wards/

The regulatory framework for social housing in England from April 2010 51


constituencies. It also includes other bodies

representing tenant(s).

Periods within which the TSA

aims to respond to complainants

on the issues they have raised

5.5 Issues brought to the TSA’s attention will be

acknowledged as soon as possible and no later

than five working days of receipt, with an indication

of whether we will investigate it with the provider.

Where this is not possible we will inform the

complainant that we require further time within five

days and provide a revised date.

Allegations and whistle blowing

5.7 Allegations tend to have an ‘organisational’

focus and may point to a problem at the

organisation, which may include fraud or some other

systemic failure. A ‘whistleblower’ tends to describe

someone who works in or for an organisation who

raises an allegation about his or her employer.

These employees may have legal protection under

the Public Interest Disclosures Act (PIDA). The

TSA will respond to allegations about providers in

accordance with its procedures for responding to

allegations and whistle blowing 44 .

5.6 We will inform the complainant of one of two

options:

Option 1 – The issue is not to be investigated with

the provider but TSA will note it within our overall

information about providers. The complainant will

be directed to the most appropriate place to have

their complaint considered (eg the provider or the

relevant ombudsman service).

Option 2 – The issue will be investigated with

the provider, in which case we will set out how

we plan to engage with the provider. Again, the

complainant will be directed to the most appropriate

place to have their complaint against the provider

considered.

Complaints about the TSA

5.8 Anyone can make a complaint about the TSA.

Our approach to dealing with complaints about our

service is set out on our website. Our approach will

take into account any implications arising from our

intended statement on how providers can appeal

against regulatory decisions and judgements in a

more proportionate way before the statutory routes

of redress in the 2008 Act are triggered, when it is

published by 30 June 2010.

44

This is under review and will be published on our website shortly.

52


6 Intervention and enforcement

6.1 We expect providers to take responsibility for

their self-improvement and we expect this to be

effective in most cases. However, in cases where

this approach is either inappropriate or has proved

unsuccessful, we may need to consider the use of

our regulatory, enforcement and general powers.

This section sets out our general approach.

or where a provider has mismanaged its affairs or, in

some cases, for other reasons that are specified in

the 2008 Act 46 .

Our new graduated range of

powers

Guidance on the use of our

statutory powers

6.2 This section presents the high level objectives

and principles that underpin our approach to dealing

with poor performance and using our regulatory

and enforcement powers. Reference to ‘powers’

in this section relates to those powers listed in the

sections below.

6.3 Having consulted, as required by the 2008

Act, on how we intend to use some of our formal

powers, guidance notes for how we will use

specific powers are published in the annexes to this

document 45 . The guidance notes should be seen in

the context of the approach set out in this section.

6.4 In broad terms, the TSA can exercise the

powers described below where it suspects or has

evidence of a failure against one or more standards

6.5 We have a number of regulatory powers under

the 2008 Act to monitor providers’ compliance with

regulatory requirements or in the event that we

suspect a provider is failing to meet a standard or is

in breach of other regulatory requirements.

6.6 Our regulation is cross domain and we are clear

that in setting our policies, including the principles

of how we use our powers, we aim to be ‘provider

neutral’. The Government has consulted on our

powers in relation to councils throughout the course

of 2009 and strongly supported the principle of

cross-domain provisions as far as possible except

where the legitimate democratic and financial

differences of councils warrant a different approach.

Monitoring and investigative

powers for all providers

6.7 The following regulatory powers apply from

1 April 2010 to all existing RSLs, local authority

45

We have not at this stage consulted on guidance on the detail and use of all our powers. There are some powers that relate to local

authorities (such as censure of an officer during or after an inquiry and appointment of an adviser) where we are working further with local

authority stakeholders to understand better how these powers might be used. There are also some powers that are novel and complex and

where more time is required for discussion with stakeholders before we can produce detailed guidance. These relate to powers to transfer

and tender management. These powers will be subject to a further supplementary consultation on our use of powers in due course.

46

The term ‘mismanaged’ in relation to the affairs of a provider is defined in section 275 of the 2008 Act as: managed in contravention of a

provision of the 2008 Act or of anything done under the Act; or otherwise conducted improperly or inappropriately.

The regulatory framework for social housing in England from April 2010 53


providers and any new not-for-profit and profitmaking

providers:

• arrange a survey (section 199)

• arrange an inspection (sections 201 to 203)

• direct an inquiry (sections 206 to 209)

• direct an extraordinary audit (section 210)

6.8 The following range of enforcement powers

apply to all existing registered social landlords, local

authority providers and any new not-for-profit and

profit-making providers:

• enforcement notice (sections 219 to 225)

• direct a tender of management (sections 247

and 248)

• direct a transfer of management (sections 249

and 250)

6.9 The following general powers also apply to all

existing registered social landlords, local authority

providers and any new not-for-profit and profitmaking

providers:

• collect information and documents (sections 107

and 108)

• direct the Homes and Communities Agency not

to invest (section 106)

• place restrictions on disposals or transfers of

property (sections 170 to 176)

6.10 If a provider is a previous RSL (or is not a

local authority and intends to become a registered

provider), we have a range of enforcement powers

which can require the provider to take specified

action to resolve an identified failure or other

problem. The following enforcement powers

(additional to those set out in 6.7) can be used for

providers who are not local authorities:

• penalty fine (sections 226 to 235)

• award compensation (sections 236 to 245)

• appoint a manager (sections 251 and 252)

• direct a transfer of land (sections 253 and 254)

• make and execute an amalgamation of an

industrial and provident society (section 255)

• direct restrictions during or following an inquiry

(sections 256 to 265)

• remove an officer in circumstances such as

bankruptcy (sections 266 to 268)

• appoint new officers (section 269)

6.11 The following additional relevant general

powers will also apply to non-local authority

providers:

• give financial assistance (section 95(3))

• direct how sums in a disposals proceeds fund

are used, allocated or paid (section 178)

• settle the affairs of providers that become

insolvent (sections 144 to 159)

• petition to wind up a provider (section 166)

• transfer property on dissolution (sections 167

and 168)

6.12 Some of these powers are similar (but not

exactly the same) to those the TSA previously

used to regulate housing associations and other

registered social landlords under the Housing

Corporation’s 1996 Act powers. Those that are

substantially similar include the powers to conduct

an inquiry, arrange an extraordinary audit, approve

54


changes to non-profit providers’ management and

constitution, transfer of land, restriction of dealings

during or following an inquiry and suspension,

removal and appointment of an officer. Our new

enforcement powers now include an enforcement

notice, a penalty fine, award compensation, direct

a tender of management, direct a transfer of

management, appoint a manager and make and

execute an amalgamation of an industrial and

provident society.

If a provider is a local authority

6.13 The following enforcement powers in addition

to those set out in 6.7 have been confirmed by

Parliament 47 in relation to local authorities:

• appoint advisors to a local authority (section

252A)

• censure a local authority officer or agent during

or following an inquiry (sections 269A and B)

How we will use our powers:

general

6.14 Our approach to using our powers is

underpinned by three key components: our

fundamental objectives, our standards (and any

associated codes of practice) and any specific

requirements in the 2008 Act in relation to using

our powers.

6.15 We may consider the use of our regulatory

powers, including inspection, to investigate where

we suspect that there may have been a failure to

meet the standards or that the affairs of a provider

have been mismanaged. The investigation may lead

to no further action, an agreed self-improvement

plan without recourse to our formal enforcement

powers, or in some cases where it is warranted,

more formal use of our enforcement powers.

6.16 We are not required to use our formal

investigation powers (such as an inspection or

inquiry) in advance of the use of our enforcement

powers. For example, an enforcement notice could

be issued if the TSA is satisfied that a provider has

failed to meet a standard 48 . However, our general

approach will be to apply the more proportionate

power available to us taking into account the

seriousness of the issue under consideration.

6.17 We will keep the use of our powers under

regular review, and may decide to exercise any of

the powers if improvement by the provider is not

sustained or if the circumstances of the case make

it necessary to do so. The TSA may use its powers

either singly or in combination depending on the

circumstances and issues of the case.

47

Laid as Housing and Regeneration Act 2008 (Registration of Local Authorities) Order 2010.

48

Section 220(2): this section also contains other examples.

The regulatory framework for social housing in England from April 2010 55


Principles underpinning our

approach to using our powers:

what providers can expect from

us

6.18 We will adopt the following principles.

• We will generally take into account the role

of self-improvement before using any of our

enforcement powers. In cases where this

approach is either not appropriate (for example,

where it is necessary to protect tenants from

immediate harm or to protect public funds)

or has proved unsuccessful, we will need to

consider how to address the issue using our

more formal powers

• Where we do use our enforcement powers, we

will usually adopt a graduated approach

• We will have regard to our fundamental

objectives when considering any individual case

and will seek to balance the interests of the

provider, its tenants, its key stakeholders and the

impact on public funds when responding to the

circumstances of each individual case

• We will be proportionate in our approach,

consistent in how we make judgements,

accountable for our actions and transparent in

our relationships with the provider, its tenants

and other stakeholders. There may be occasions

where the pursuit of our statutory objectives (eg

financial viability) limits how transparent we can

be with third parties whilst we are considering

using our powers in relation to a provider

• We will always explain the grounds and give

reasons for taking action. We will usually give

notice of any action (in some cases we are

required to do so by the 2008 Act) unless to

do so would undermine our ability to act or the

interests of tenants means we cannot

• We will assess the most appropriate course

of action taking account of the particular

circumstances of the provider (including any

structural differences arising from the type of

provider or the financing arrangements that they

must operate), the level of risk and the potential

impact associated with the provider, tailor our

regulatory engagement accordingly and always

take action which is commensurate with the

materiality of the breach or failure

• We will give careful consideration to any

remedial strategies proposed by the provider,

including any relevant voluntary undertakings,

and will seek to agree the way forward with

the provider when it is prepared to resolve the

presenting issues and we conclude that it has all

the resources necessary to do so

• We will take account of any significant changes

in circumstances and adapt our approach

accordingly

6.19 We may need to react and respond as a matter

of urgency to unanticipated and exceptional events

that happen from time to time. In circumstances

where we consider it necessary and expedient to do

so we may adjust the intensity of our engagement

with a provider, or exercise one or more of our

powers with little or no notice, particularly in

circumstances where giving notice would defeat the

purpose of taking the proposed action or where it is

necessary to protect tenants from immediate harm

or to protect public funds.

56


How we will engage with

providers

6.20 We want to be transparent in our relationship

with a provider when we are considering the use

of any of our enforcement powers. Our approach

will need to have regard to the circumstances of

the case, particularly where we think that urgent

or immediate action is necessary and we have to

apply the power with little or no notice. We will apply

the following principles when we engage with a

provider in circumstances where we are considering

using our formal powers (whilst respecting the fact

that the 2008 Act in some cases establishes a

procedure to be followed and this is set out in the

detailed guidance notes):

• we will have dialogue with the provider before,

during and following this process in accordance

with our usual approach to regulatory

engagement with the provider to ensure we

work together to protect tenants, social housing

assets and public funding. This includes

informing a provider when we are minded to use

a power explaining the issues and concerns we

have and giving the provider an opportunity to

respond to this

• we will give notice to a provider when we

propose to use a power. We will explain the

power and the issues or concerns that have

made us consider using it

• we will invite the provider to make

representations in response to our notice and to

give us any information or comments, including

any relevant voluntary undertaking, it thinks

might help us make our decision about whether

or not to use the power

• we will carefully consider any representations,

information and comments, including any

relevant voluntary undertakings received from

the provider in coming to a decision about the

action we intend to take

• we will notify the provider of our decision

and give our reasons for making it. We will

tell providers about any appeal or challenge

procedures related to our decision and any

related timescales

6.21 We will take into account any implications

arising from the TSA’s intended statement of

appeals against our judgements and decisions once

this is published.

Factors that may lead to the use

of our regulatory, enforcement

and general powers

6.22 In broad terms, any decision will be based on:

• the seriousness of the failure or problem

identified

• the urgency with which the problem or failure

needs to be addressed

• the level of risk associated with the provider and

the potential impact of its failure

• the degree of assurance given by the provider

to the TSA in relation to action it is taking or

will take to resolve the issue. We may take into

account the provider’s history in dealing with

relevant issues

The regulatory framework for social housing in England from April 2010 57


• the resources available to the provider to resolve

the problems

• proportionate use of resources that need to be

applied to our regulatory engagement with the

provider

6.23 We will notify the provider when we are

minded to use any of our regulatory, enforcement

and general powers.

6.24 In order to bring about improvements, we

may propose an action plan setting out the key

corrective actions required and the milestones and

timetable in which they should be achieved. We will

usually work with the provider to agree how best to

implement this plan. We will carefully consider any

remedial plan submitted by a provider, including any

voluntary undertaking it gives to the TSA.

6.25 We will notify the provider when it has

completed the key corrective actions to our

satisfaction. This will be confirmed following a

comprehensive risk assessment of the provider.

• protect the interests of tenants, including by

improving standards of performance so that

tenants receive a quality of service delivery

required by our standards

• maintain the financial viability of the provider

and require the provider to meet acceptable

standards of organisational effectiveness and

service delivery

• act as a catalyst for change within the

provider and ensure that any improvements in

performance are sustained in the long term

• protect public expenditure and guard against the

misuse of public funds

• reassure lenders

• protect the reputation of providers of social

housing as a whole

• address and seek to resolve any additional

relevant and material matters that come to light

while a provider is subject to our regulatory,

enforcement or general powers

• where necessary, co-ordinate our approach

with other regulatory bodies, such as the Audit

Commission

6.26 Our aims will always be underpinned by our

fundamental objectives and our standards. Our

specific objectives may vary from case to case or

change during the course of a case, but broadly

speaking we would want to:

• address and resolve the presenting problems

and any related or contributory problems

Checks and balances on the use

of our powers

6.27 There are a number of checks and balances

in the 2008 Act which must be applied to the TSA’s

use of its powers.

58


Regulators’ compliance code

Voluntary undertakings

6.28 The TSA must regulate in a manner which

minimises interference and is proportionate,

consistent, transparent and accountable. The 2008

Act requires the TSA to comply with the provisions

of the Regulators’ Compliance Code 49 . The code

does not apply to the exercise by a regulator of any

specific regulatory function in individual cases.

6.30 A provider can give the TSA a voluntary

undertaking (‘an undertaking’) in respect of

any matter concerning social housing 52 . The

circumstances in which such an undertaking can

be given are widely drawn. For example, a provider

may offer such an undertaking whilst subject to

regulatory, enforcement or general powers.

Consideration before exercising an

enforcement power

6.29 The 2008 Act states the TSA must consider

four specific matters 50 before deciding whether to

or how to exercise an enforcement power 51 . They

are:

• the desirability of a provider being free to choose

how to provide services and conduct business

• whether the failure or other problem is serious or

trivial

• whether the failure or other problem is a

recurrent or isolated incident

• the speed with which the failure or other problem

needs to be addressed

6.31 In exercising some of our powers we must

have regard to any undertaking offered or given by

a provider. We will consider any undertaking offered

in such circumstances in accordance with published

procedures.

6.32 We may take into account whether a sufficient

undertaking has been offered and honoured. In

considering an undertaking, the TSA will:

• assess whether or not we consider the terms of

an undertaking are satisfactory, giving reasons

for our decision

• monitor the provider’s progress towards meeting

its undertaking and assess whether the provider

has honoured the undertaking, giving reasons for

our decision

49

Issued under section 22 of the Legislative and Regulatory Reform Act 2006.

50

Section 218 of the 2008 Act.

51

Sections 219 to 225 of the 2008 Act.

52

Section 125 of the 2008 Act.

The regulatory framework for social housing in England from April 2010 59


6.33 Although an undertaking will always be a

voluntary matter for the provider, we will respond in

the event a provider asks whether an undertaking

would address matters that have necessitated

enhanced scrutiny by the TSA.

6.34 While we must have regard to any undertaking

offered or given by a provider, there may be

circumstances where the existence of a voluntary

undertaking may not prevent further enforcement

activity. This might include circumstances in which

we consider that the undertaking is unsatisfactory

or insufficient to resolve the problems or where

urgent or immediate action is necessary.

6.35 We will usually make a public statement in

circumstances where we accept an undertaking.

60


7 Registration and deregistration

7.1 This section outlines the new registration and

deregistration arrangements that are in place from

1 April 2010.

Existing RSLs and local

authority providers

7.2 All providers on the TSA’s existing register

(known as RSLs) transfer automatically to the new

register on 1 April 2010, and all applicable local

authority providers are registered without the need

to apply.

7.5 Applicants must be English bodies and be, or

intend to become, providers of social housing in

England. To be an English body, applicants do not

have to be any particular type or status and could,

for example, be a partnership. However, we require

that an applicant has a legal presence in England.

This will enable us to exercise any necessary

statutory functions and will similarly provide tenants

with the legal presence they will require. ‘Social

housing’ means low-cost rental or low-cost home

ownership as defined in sections 68 to 77 of the

2008 Act; the meaning of ‘provider’ is defined in

section 80 of the Act.

The eligibility criteria and

conditions for new entrants

7.3 New (non-local authority) entrants eligible

for registration from 1 April 2010 will need to

meet new registration conditions that reflect the

changes in the 2008 Act. The TSA, consistent with

its fundamental objectives, wants to encourage

new entry to support the increased supply of social

housing and to provide greater choice to tenants.

Eligibility criteria

7.4 Applicants must:

7.6 In considering an application from an intending

provider, we will require a strongly evidenced

business plan that clearly sets out the plan

for market entry (including any organisational

changes) and demonstrates how funding or land

ownership will be secured to put the plan into

action. Evidence either of existing homes or land,

or of financial provision for buying or developing

homes, will provide assurance of the intent to

provide social housing. This is likely to be evidence

of land ownership and planning permissions or

loan or other financing arrangements. Once we are

satisfied of the applicant’s intent, the applicant will

be assessed in accordance with the registration

criteria established.

• be English bodies

• be, or intend to be, providers of social housing in

England

• satisfy the criteria established by the TSA

7.7 We will take a pragmatic approach to assessing

the ‘intention to provide’, setting a timeframe to

review the intending provider's position that will be

based on the applicant’s business plan. We would

expect to discuss deregistration with a registered

provider when the position was reviewed if there

The regulatory framework for social housing in England from April 2010 61


appears to be no prospect of the business plan

coming to fruition. This discussion will likely result

in us either continuing to consider the registered

provider as an intending provider or deciding that

deregistration is appropriate as the registered

provider is no longer eligible for registration.

7.8 The requirement in the 2008 Act for registered

providers to be “landlords” means that applications

after April 2010 could be received from subsidiary

organisations of both non-profit and profit-making

organisations where the parent is not technically

eligible for registration. Given the approach to

regulating group structures that the TSA (and

the former Housing Corporation) has adopted

– which effectively regulates at the group level –

we want to ensure that any changes in this area

are managed in a way that continues to provide

effective regulatory assurance and commands the

confidence of the sector and lenders. We need also

to consider the practical effect of the requirement in

section 194(2) of the 2008 Act that, in respect of

profit-making providers, allows standards to be set

under this section only so far as they relate to the

provision of social housing.

which have been used in other sectors where the

regulator regulates a subsidiary or part of an entity.

We will not wish to register such an applicant unless

we receive this assurance.

7.10 For all existing providers (RSLs) that

automatically transfer to the new register on 1 April

2010, the Government and the TSA have agreed

that these providers will continue to be registered

and regulated as if they meet the requirements

for registration in the 2008 Act, whether or not

in practice this is the case (for example as with

a non-stock-holding parent of a social provider

subsidiary) 53 . The Government expects to revoke

these transitional arrangements at a future date to

ensure a level playing field between different types

of provider. This is not expected to be within three

years, during which period the TSA will work with

existing providers to ensure that there is an orderly

transition to new group structures that meets the

requirements of the 2008 Act, gives regulatory

assurance and maintains lender confidence. The

TSA will set out its process for taking forward

this issue following Parliamentary approval of the

relevant secondary legislation.

7.9 Where a new applicant falling into either of

these circumstances applies to be registered after

April 2010, we will expect it to satisfy us that it

can demonstrate its structure and governance

arrangements afford us effective and enduring

regulatory assurance. This may involve agreeing

with us appropriate ring-fencing agreements,

7.11 Our requirements are set out in the

Governance and Financial Viability Standard (1.4)

and are not therefore duplicated in the registration

criteria. This is a new area for the TSA and, as

such, we plan to consult further with the sector to

determine how these requirements can best be

discharged.

53

Using the transitional arrangements in secondary legislation needed to support the introduction of the new Act in April 2010.

62


7.12 The legislation provides for the registration of

landlords of social housing. An ALMO or TMO that

was not a landlord but a property manager would

not meet the eligibility conditions in the Act and

so would not be capable of registration. However,

ALMOs and TMOs that are landlords will be eligible

for registration, although there is no requirement for

them to register unless they wish to seek funding

from HCA and remain as landlord of the property.

Unlike for a local authority, if an ALMO or TMO

were to be regulated they could be subject to the

full range of TSA standards, including governance

and financial viability. We will continue to work

closely with stakeholders such as the Councils with

ALMOs Group (CWAG) and the NFA about how this

works effectively in practice.

TSA criteria

7.13 Once the TSA is satisfied that an applicant

is eligible for registration, the applicant will be

assessed against any registration criteria set by the

TSA. Any applicant that is eligible and meets our

registration criteria must be registered.

7.14 The TSA's criteria are based on:

• an applicant’s financial situation

• its constitution

• other arrangements for its management

period of time. We will not expect to register an

applicant that was unable to satisfy us of this.

7.16 We will also assess applicants against the

governance requirements and those on tenant

involvement and empowerment, but will not always

expect compliance with these standards at the

point of registration, accepting a reasonable path to

compliance that will be subject to regular review.

7.17 We will also assess the management

arrangements in place within an applicant’s

organisation to see whether these provide a

reasonable path to achieving compliance with

the service delivery standards. We will not directly

assess compliance with the service delivery

standards.

7.18 In judging what is a ‘reasonable path’, we will

take a risk-based view on the level of compliance

already achieved, the nature of the actions needed

to achieve compliance and the proposed timescale

for completing these actions. A registered provider

not achieving compliance with the relevant standard

within a reasonable timescale could expect us

to consider whether enforcement action was

appropriate.

7.19 Non-profit making organisations are required

to have within their objects:

7.15 Financial viability is an absolute requirement.

We will expect all applicants to demonstrate that

they meet this part of the standard at the point

of registration and will continue to meet it over a

• the provision of social housing

• not-for-profit status

• non-distribution of assets to members

The regulatory framework for social housing in England from April 2010 63


Figure 5 The registration criteria

An applicant must meet the financial viability requirements within the Governance and Financial Viability

Standard at the point of registration and demonstrate it can sustain this on an ongoing basis.

An applicant must meet, or demonstrate a reasonable path to meeting, the governance requirements of

the Governance and Financial Viability Standard.

An applicant must meet, or demonstrate a reasonable path to meeting, requirements on tenant

involvement and empowerment.

An applicant must have in place management arrangements that enable it to meet, or demonstrate a

reasonable path to meeting, the service delivery standards.

A non-profit applicant must have within its objects the provision of social housing, not-for-profit status and

non-distribution of assets to members.

7.20 There are no requirements in the registration

criteria about the objects of profit-making

organisations as we have no subsequent oversight

of changes to these objects.

Registration process

7.24 Our registration process will be influenced by a

number of objectives including:

7.21 Other than on an organisation’s objects, the

registration criteria are the same for both non-profit

and profit-making applicants. This is because the

standards are the same for all registered providers

(except in relation to governance and viability for

local authorities).

7.22 Figure 5 sets out a summary of the TSA

registration criteria.

7.23 The registration criteria can be reviewed

and, following consultation, adjusted at any time

after 1 April 2010. We plan to do this periodically.

• a proportionate registration process, seen in the

context of the size of the social housing portfolio

and risk profile of the potential entrant. Size of

portfolio could be in absolute terms and related

to geographic concentration

• when handling applications from, for example,

large organisations, such as an ALMO, that

own only a limited number of social housing

properties, our assessment against the criteria

will reflect the risk profile of the applicant and

its size in terms of the number of social housing

properties it has or intends to have, but the

assessments against the Governance and

Financial Viability Standard will take account

of the wider organisation within which these

properties rest

64


• where an organisation seeking grant funding

from the HCA indicates that it expects to retain

ownership of the property when it is let, we will

maintain close liaison with the HCA during the

registration process

in the event of the creation of a new organisation

born out of an existing registered provider,

perhaps as a result of a merger, the TSA will take

a proportionate approach having regard to the

knowledge we have of the relevant registered

provider(s)

• where an applicant for registration has already

been accredited by the TSA or its predecessor

body, the Housing Corporation, under the

Housing Management Accreditation Scheme,

this accreditation will be taken into account

during the registration process

Deregistration criteria

7.25 There are a limited number of defined

circumstances set out in the 2008 Act that would

lead to the compulsory deregistration by the TSA of

a registered provider (eg they have ceased to exist).

7.26 A registered provider can apply for voluntary

deregistration on the grounds that it:

• no longer is or intends to be a provider of social

housing in England

• is subject to regulation by another authority

whose control is likely to be sufficient

• meets any relevant criteria for deregistration set

by the TSA

7.27 In considering an application for voluntary

deregistration, the TSA will consider the following

relevant criteria:

• the arrangements to ensure the continued

protection of tenants

• the arrangements to ensure there is no misuse

of public funds

7.28 In looking at the continued protection of

tenants, we will:

• expect the registered provider to demonstrate

ongoing financial viability

• expect the registered provider to be achieving a

satisfactory level of performance

• take into account any relevant regulatory or

other controls that the registered provider would

continue to be subject to after deregistration

(including membership of the Housing

Ombudsman scheme)

• take into account the views of the tenants and of

any local authority in whose area the registered

provider lets housing

• take into account the nature and scale of the

social housing provision of a registered provider

7.29 In considering arrangements for guarding

against the misuse of public funds, we will consider

the amount of capital public funding outstanding

and any current or planned development for which

the registered provider had received or would

receive public funding. Deregistered providers will

still be subject to TSA consent rules for disposals

unless we have already directed that any specified

dwelling should cease to be social housing. We

The regulatory framework for social housing in England from April 2010 65


would not expect the power to ‘declassify’ social

housing to be widely used. Deregistered providers

would also still be subject to any conditions

attached to the public funding imposed by the HCA

(or the predecessor body, the Housing Corporation).

7.30 Deregistered providers can apply again for

registration at any time.

The register

7.31 The TSA must maintain a register of providers

of social housing, available for public inspection,

that shows whether an organisation is profitmaking

or not. Some of our powers, for example

consent on changes to objects, relate only to nonprofit

registered providers so this is an important

distinction. Any registered and non-registrable

charities will be designated as non-profit making.

For other organisations registering after April 2010,

the 2008 Act requires us to designate them as nonprofit

making if:

• the organisation does not trade for profit or is

prohibited by its constitution from issuing capital

with interest or dividend at a rate exceeding that

prescribed under section 1(1)(b) of the Housing

Associations Act 1985

• a purpose of the organisation is the provision or

management of housing

• any other purposes are connected with, or

incidental to, the provision of housing

7.32 If a new registered provider does not meet

these requirements in the TSA’s assessment then it

will be designated profit making.

7.33 The Secretary of State can make regulations

providing that a specified purpose is or is not

incidental to the provision of housing, but has

indicated that no such regulations will be issued

in the medium term so we need to set out how we

will decide what is “connected with or incidental

to the provision of housing”. Currently there are

permissible purposes established under section

2(4) of the Housing Act 1996 and subsequent

statutory instruments. We propose to have regard to

the list of permissible purposes but will clarify over

time the purposes we consider are connected with

or incidental to the provision of housing.

Fees

7.34 The 2008 Act makes provision for the TSA

to charge fees to providers for initial registration

and/or continued registration. In July 2009, the

Government announced that, in view of the current

financial pressure on housing associations as a

result of the economic downturn, fees would not

be levied on any providers to cover the costs of

regulation until April 2011 at the earliest.

66


Accreditation of managers

7.35 The 2008 Act includes a power for TSA to

issue an accreditation scheme for managers of

social housing. We have no plans at present to

establish such a scheme. We will keep this position

under review as we develop further strategies

to open up the market in housing management

provision.

7.36 Separately, under transitional arrangements,

the Homes and Communities Agency will maintain

the Housing Corporation’s Housing Management

Accreditation Scheme (HMAS) insofar as it

continues to be required to enable grant recipients

to fulfil the conditions attached to any financial

assistance given under section 27A of the Housing

Act 1996.

The regulatory framework for social housing in England from April 2010 67


8 TSA Directions under the 2008 Act:

accounts and Disposal Proceeds Fund

Accounting direction

8.1 The 2008 Act 54 enables the TSA to give

Directions to registered providers about the

preparation of their accounts. A Direction may only

be given to a profit-making registered provider in

respect of social housing activities. It does not apply

to local authorities. This Direction is given following

consultation which we issued in November 2009.

8.2 Accounting requirements for registered

providers were previously subject to general

determinations issued by the Housing Corporation.

The last accounting general determination was

issued in 2006 55 . For now we will continue to

use this 56 . This will only be required from private

registered providers and, in the case of for-profit

registered providers, only in respect of their social

housing activities.

8.3 We will review the accounting requirements

of registered providers and will consult on this in

due course. We wish to ensure that social housing

activities can be ring-fenced. We will take due

regard of the needs and wishes of stakeholders in

ensuring that financial information is transparent

and comparable whilst seeing where unnecessarily

complex and detailed analysis may be reduced.

Disposal Proceeds Fund

8.4 The 2008 Act 57 establishes that in various

circumstances registered providers need to create

a Disposal Proceeds Fund (DPF) and follow certain

rules in regards to the use of that fund. A registered

provider may only use the DPF in accordance with

a Direction set by the TSA. To ensure continuity,

the Secretary of State has approved secondary

legislation to enable us to continue to use the

existing DPF determination issued under the

Housing Act 1996. This satisfies the requirement in

the 2008 Act that a Direction set by TSA should be

approved by the Secretary of State.

8.5 The TSA will continue the use of the DPF in

accordance with the guidelines and determination

published by the Housing Corporation, save that

references need to be made to the TSA and the

2008 Housing and Regeneration Act where

appropriate 58 . The TSA will review the DPF in due

course and any future Direction will be subject to

consultation and Secretary of State approval, as

appropriate.

54

Section 127.

55

This was issued subject to section 218 and paragraph 22 of schedule 11 to the Housing Act 2004 and section 7 and part III of schedule 1

to the Housing Act 1996. It is available from our website www.tenantservicesauthority.org/server/show/nav.3545

56

Save that technical references need to be made to the TSA and the 2008 Housing and Regeneration Act where appropriate.

57

Section 177.

58

The DPF was previously subject to section 24 of the Housing Act 1996 and determinations issued by the Housing Corporation. The last

DPF general determination was approved 17 November 2008.

68


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Manchester M1 1RG

For enquiries, contact us at:

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The regulatory framework for social housing in England from April 2010 69


Notes

70


The regulatory framework for social housing in England from April 2010 71


The regulatory framework for social housing in England from

April 2010

This document sets out the new regulatory framework that social housing providers have to meet from April

2010. At its heart are six standards, and against each of these, we have described the outcomes landlords

should meet and our specific expectations of them.

We have developed the regulatory framework in collaboration with tenants, local authorities, housing

associations and our many other partners. Its aim is to help improve the services provided for the eight

million people who live in social rented and shared ownership homes in England.

72

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